January 1st not only marks the start of a new calendar year, it often means a fresh start in our personal lives. We all get to step into a brand new year with a clean slate. Everything is in front of us and the possibilities are endless.
If you’re like most people, you’ll take this opportunity to write down a few goals or resolutions. Maybe you’re pledging to lose a few pounds, or to finally land that promotion at work. Maybe you’ll start this year swearing off caffeine or riding your bike to work.
What resolutions can you make in your finances? I’ve covered a lot of different topics this year when it comes to money. As I looked back and reflected on 2016, I realized a lot of these things would make great new year’s resolutions. Not only are they things that can be easily implemented immediately, they also will yield huge results.
So, ladies and gentlemen, I present to you my top 5 financial new year’s resolutions.
1. Implement the 10% Rule
One of my favorite tricks for quick and simple savings is to put the 10% rule into effect. Not only is it one of the easiest things you can do, it can also save you hundreds each month.
Take a look at the variable expenses in your monthly budget. This includes things like restaurants, clothing, groceries, entertainment, cosmetics, music, and technology. Take the amount you allocate to each category and cut it by 10%. For example, if you budget $200 per month for restaurants, cut it to $180 per month. This cut won’t be that noticeable ($180 feels a lot like $200 when it comes to eating out) and you’ll save $20.
I know $20 doesn’t seem like a lot, but what if you did that across multiple categories? If I saved $20 on each category I listed above, that’s $140 a month I saved by doing very little. That $14 can be used for one of my financial goals, such as paying off debt or building my savings.
2. Have a “No Spend” Month
This one is tough, but it’s temporary. Try going on a one-month fast from spending money.
Before you skip ahead to idea number three, hear me out. What if you went 30 days without going out to eat, buying new clothes, or seeing a movie? For a single month try to only spend money on the essentials. How much money could you save in that month? Take a look at your budget and see how much you spend on the fun things. This could be a huge chunk of change staying in your pocket.
Talk to your friends and see if they’ll do the challenge with you. Not only are we more successful in larger numbers, but if your friends aren’t going out, that may help with your temptations, too!
Want to really push yourself this year? Pick multiple months throughout the year to try the no spend challenge!
3. Go on a Pantry Fast
When you walk into your pantry, what do you see? If you’re like most people, it’s a wall of food and cans that have been there longer than you can remember. Maybe it’s time to put them to use.
Try going on a pantry fast. So many times we go to the store because there’s nothing to eat, yet our shelves are completely filled with food. It’s time to put that food to use! Go through all of your food items in your pantry, refrigerator, and freezer. Enter each item into supercook.com.
Supercook will find you recipes using only the items you already have. You’ll be amazed at the great meals you can make without a single trip to the store.
The real challenge is to see how long you can last on your pantry fast! The longer you go, the more money you’ll save. If you spend $100 per week at the store, then you are saving $100 for every week that you push the fast. That’s some pretty good savings.
4. Start a Monthly Budget
While this one isn’t a quick trick, it will yield the biggest results in your finances. There’s no better time to start budgeting than on January 1st!
The average client I work with ends up saving between $300-$500 by simply creating a budget each month and sticking to it. In fact, most people tell me they feel like they got a raise after budgeting!
Write your take home pay at the top of a sheet of paper. Then, list all of your monthly expenses below it. The first time you run your budget, the numbers may surprise you. Your goal is to ensure your take home pay is greater than your total expenses for the month.
If you get to the bottom and realize your expenses are greater than your income, then it’s time to make some cuts! This may be a good time to test out the 10% rule. It’s essential that you don’t spend more than you make.
What if you get to the bottom of the page and you have money left over? That means you need to give those dollars a job, too. Direct them toward whichever financial goal you’re working on. If you’re paying off debt, throw it at the debt. If you’re trying to boost your savings, send it to your savings account. The most important thing is that you decide where you want it to go.
5. Invest in a Financial Coach
I promise you this isn’t going to be one of those blogs where I give you a few ideas and end it with a sales pitch. In fact, I’m not even going to tell you that you should hire me. However, I do think you should consider hiring someone to help you accomplish your financial goals, and a financial coach can do just that.
A coach will meet you wherever you are in your financial journey and help you create a plan to win with money. They listen to you and walk with you as you create a roadmap to reaching goals. Whether it’s creating a realistic budget for your family, knocking out debt, negotiating with debt collectors, or building wealth for the future, a financial coach can help.
Consider finding a coach near you and give them a call. For the cost of a month of cable, you can drastically improve your quality of life.
Whether you choose to implement one or all five of these ideas, I hope that you have one of the most productive years yet! Happy new year!