New Year, New Financial You?
It’s all fun and games while the eggnog is flowing and the tinsel is still hung, but the post-holiday spending hangover can mean bad news for your financial situation if you don’t make adjustments in the new year. If the holidays left you and your budget feeling a little bloated, then it may be time to take a cue from this past season and plan ahead for those to come!
- Start Budgeting
The first step towards getting “back on track” begins with making a budget. Analyze your current spending habits to truly understand what adjustments you may need to make.
A few things to consider:
- Are there unused subscriptions, memberships, or other hidden fees you can eliminate or reduce?
- How much money are you usually left with at the end of the month?
- What expenses can you possibly reduce by sharing with a family member or friend?
Once you understand which expenses might need some trimming, go ahead and build your budget plan for the next few months. I suggest using our Navigator or Intuit’s Mint.com regularly as a great tool to help with budgeting. You can see all your expenses and categorize them to easily see where all your money is going. I use Monday evenings to look at last week’s expenditures and make sure we are on track with our budget. It’s also a great time to pay bills and look at your calendar for the week.
2. Tackle Debt
Credit card debt is one of the most expensive forms of debt because the interest rate you can incur are so high. Don’t let your debt derail you in the new year. Make a plan to allocate any extra savings in your monthly budget towards making additional payments on the credit card with the highest rate of interest. Need help tackling your credit card debt? We have some great tools to make the best plan for you.
3. Spending Freeze
Put that credit card in “hibernation mode” and take the next several weeks to hit the reset button financially. This means only spending money on your basic necessities. Start to add in a few days a week where you don’t spend anything!
4. Get cooking
Gather your favorite recipes and get cooking! The winter months are a great time to settle in and enjoy some comfort food at home. You’ll be amazed how much money you can save when you take the time to meal plan, grocery shop, and put those kitchen gadgets to work. Your crockpot and instant pot are great tools for a stress free and easy dinner after returning to the office.
Add in 30 minutes of loving movement every day. This can be through hitting the gym, to taking a walk with your best friend. Getting those endorphins working will also help your mental health. There has been numerous studies showing a strong link between financial health and fitness.
On days that I’m not going to the barn, I have started to ride my Peloton in the mornings before work. I’ve found that if I put it off until the end of the day, it often ends up not happening. Kira is also trying to convince me to run a 5k with her this year so I’m trying out running on the treadmill for the first time in my life.
6. Contribute to retirement
While this may seem decades away for some, it is paramount to start contributing to your retirement as soon as possible. A great way to get started is to met the match that your employer provides. Otherwise you are leaving “free” money on the table! This will also help reduce your taxes. And don’t even get me started on compounding interest.
Don’t have a retirement plan offered at work? No problem! Open up an IRA (Roth or Traditional depending on your taxable income) and set up a direct deposit to contribute when your pay check hits.
Already meeting the match? Awesome! Start increasing your contribution by 1% each pay raise or year, whichever is more often.
Happy New Year!