The new year is a new opportunity to take control of your finances. Americans across the country are gearing up to write their New Year's resolutions. No matter your financial situation, adding a few solid tips to your list of resolutions will help make 2016 a personal success for your finances.
Decide 2016 will be different
Reflect on the financial ups and downs of the previous year:
- What emergencies weakened your budget?
- What financial bonuses increased your spending?
- How do you want spending this year to be different?
NerdWallet advised writing down a list of what's valued most, such as time with family, finally taking that vacation or maybe even gearing up for retirement. The better you understand what you want, the stronger your spending plan will be and the money and time you'll need to invest.
If your checking account is shared with a spouse or significant other, take a moment early in the year to go over spending plans. Couples that determine a monthly spending and saving budget can lead to a smoother relationship during the new year. Children benefit from such discussions as well. It's never too early for financial education. Future of Business suggested using programs such as Money as You Grow to provide the little ones with money sense.
Make your financial resolutions known
Don't just write down your financial resolutions: Tell a friend, or several friends. According to U.S. News & World Report, telling someone about your plans has a positive correlation to how strong a commitment you make. It helps to be held accountable for your new financial stability by telling family and friends and may result in their ongoing support.
This can help later in the year when you're invited to an expensive dinner, but have to turn it down because it isn't in the 2016 budget. You'll avoid any awkward explanations and guilt for missing the event. NerdWallet explained that living within your means is a keystone to financial success. Your lifestyle expenses should remain the same because once you begin spending more, it's hard to scale down to a less expensive way of living.
As 2016 begins, consider how much you can use to start your savings or debt payment plan. Holiday bonuses and tax returns are perfect opportunities to save. Any increase in income, whether from a promotion, new job or tax return is a perfect source of new savings. Avoid lifestyle inflation, which is the decision to spend more because you earn more.
When saving for retirement, vacation or debt payments, pay yourself first by putting away money each month before you start to pay your bills. For vacations or retirement plans in the works, keep pictures of your destination handy to help stay on task.
The most important thing to remember this New Year's is that healthier financial habits start small and you can incorporate them one step at a time.
For more information about smart ways to manage your finances, contact Landmark Bank.
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