If you want to start the New Year off on the right financial foot the way to do so is to change your financial behavior. If one of your New Year’s resolutions for 2016 was to start saving more, stop spending so much or to pay off debt let me ask you how it’s going?
Some people set goals in December for the new year and don’t actually start them on January 1st or even January 31st. I’m not sure about you but January is kind of a wash for me as I get back into a routine at work, eating healthy and going to the gym. Even though the holidays are over January still seems a little bit chaotic. So resolutions get put off until February.
Here we are. If you want to improve your money life in 2016 here are six financial tips to help you do so:
Set specific goals
There’s no reason to save money, start investing or cut expenses if you don’t have goals. Before you start making any changes to your money habits ask yourself why you’re doing it. As a financial planner when clients come into my office and ask my investment advice because they want to start saving my first question is always “Why?”
Once you set a specific goal you are more likely to work hard and achieve it because you have the end goal in mind. If you’re doing something (anything in life) “just because” there’s really no need to stick to it.
Say bye-bye to credit cards
When we’re young it makes us feel like an adult to have a lot of credit cards. There’s nothing like the feeling of swiping your credit card for the first time. The thing to remember is that buying items on credit doesn’t make us an adult, it makes us in debt.
Although credit cards are nice, we don’t need more than one. Shop around and find the perfect credit card to suit your needs whether that be a good rewards program, additional insurance or travel perks. More credit cards can lead to more spending and that leads to more debt.
Start an emergency fund
Cash savings are hard to accumulate, trust me I know. Leaving money in a savings or checking account is easy to access and I’m sure we can always find an excuse to spend it. The key to starting an emergency savings fund is to change your money mentality.
Don’t think of the money sitting there in cash, think of it as a security blanket if you have a financial emergency such as you lose your job or need to travel for a family emergency.
Rethink what you REALLY need
This is just another way to say, cut your losses. When it comes to budgeting a lot of people think it’s just spending what you have and not using credit to pay for your living expenses. Although this is a better tactic than living off of credit, it’s not ideal for saving. If you want to travel, get married, buy a house or retire someday you’ll need to cut expenses and put that extra money towards savings.
What is your best financial tip for 2016?