When the time comes to setting up financial resolutions, it isn’t always easy to figure out a good starting point. Theoretically, we know the importance of spending less and saving Money but practicing the theory in practical life can be challenging, especially during this particularly indulgent period of the year.
So, we have come up with five money goals that won’t just set you up for 2018 success, but are realistic and specific enough that you can feel confident about reaching them.
1. Yearly add $1,200 to your savings account
Most Americans savings are less than $1000 which leaves them particularly vulnerable in case of an emergency. And forget affording other excellent-to-be-necessary like air tickets to visit your family or classes that could boost our careers.
As a lump sum, saving $1.200 by a year might seem unrealistic, especially if you’re in a tight condition regarding supply of needs and money. But you break down the amount $100 a month or $23 weekly likely less you are spending on your lunch or Ubers, it’s much easier to separate the amount to your savings account. Setting up an automatic transfer from your regular account to your saving account makes saving virtually painless.
2. Make a minimum contribution from your 401 (k) to a complete employer match.
We all know, it is smart to take advantage of a 401(k) employer match. But it’s not sufficient to recoup some of that free money; you really want it all.
Take this example, courtesy of Certified Financial Planner Richard Reyes:
Let’s say your employer matches 100% of your contributions up to 3% of your salary, which for the sake of simplicity is $50,000 a year for your entire career (from ages 22 to 65). If you contribute 2%, you could have $386,000 after 43 years, assuming a 6% average rate of reward. But notch up your contributions by just 1%, and you could have $578,000 or nearly $200,000 more over your career.
3. Stop the spending on your credit card debt.
There are two ways to accept the challenge of a debt problem, Reyes says. The first is to go for broke: Eat ramen 24/7, never go out and basically living in the dark until you are debt-free. Of course, it will work but you risk such unpleasant burnout that you may slide backward instead.
A more viable strategy: commit yourself to stop using all your cards, and hold one balance at the end of the year. This will not only put you upon the right track but also give you the necessary mental boost to keep running until you reach the finish line.
4. Use a budget and buddies to rouse reasonably priced.
If you have overspending tendency, make 2018 the year you can take control on our overspending. This may be needed to exceed the tools you already use like bank alerts that give you remind overspend again and new something to try such as the 50/20/30 framework or short-term all-cash diet similar to envelop system. That’s where you stuff the envelope with money and the money dedicated to the cost section like food and transportation. When money has gone, it’s gone.
“And you want someone to hold you accountable. If you’re in a relationship, that can be a good place for accountability. Friends are another good source,” says Certified Financial Planner Andrew McFadden. “Absent those, the best place to go is to a group of others [say, a Facebook group or class] who are striving for the same thing.”
5. Save taking place for a loud-ticket item.
From an upgraded laptop to purchasing new furniture, you probably think of a big purchase you’d taking into consideration to do soon. Start a plan in January and gradually putting away money can help some pressure off.
If you are targeting $3000 savings for your next December vacation, for example, McFadden suggested to automatically transfer $250 to a newly opened savings account each month. He also said that “Keeping that money separate will help avoid the temptation and the confusion of bundling your money together and spending it on other frivolous things,”.
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