Alright, I think I’m back to my normal pre-holiday season level of functioning. You?
I have been establishing New Year’s “revolutions” since I was a little kid. At first, it was an accident. A kids-say-the-darndest-things incident. But as per my handy-dandy dictionary, a revolution is “a sudden, complete, or marked change in something.” And isn’t that what we want to do to the bad stuff in a new year?
We want to CHANGE it.
Aren’t resolutions a bit weak? They’re just set determinations or an intentions. We “resolve” to be better, but do we actually change? Eh, the jury is out on that one! I’m going to keep using “revolution” and I don’t care who corrects me!
Now let’s talk about how you can revolutionize YOUR finances in 2018!
HAVE A “NO-SPEND” DAY OR WEEK OR MONTH.
I wrote an article on spending detoxes that I strongly recommend reading. It’s not a sustainable method of managing your money (think: fad diet), but it does put everything in perspective. Deliberately not spending your money resets those beliefs that make you think your “wants” are actually needs. Spoiler alert: You’re going to find out you can survive just fine not making that impulse purchase after all!
SKIP THE SALES.
Wait, am I telling you to pay more for something? As a matter of fact, I am! Not shopping for sales is one of the most liberating changes I’ve made in my financial life. Don’t get me wrong – I love a good deal when I can get one. But I found that sales made me spend money I didn’t have on things I didn’t really want. Rather than finding a sale you want to take advantage of, flip the process – find something you want to buy and scope out the deal on that thing after you’ve decided what you’re willing to spend on it. I promise this will save you money in the long run.
PRIORITIZE YOUR PURCHASES.
You can’t have everything you want, but you can have anything you want. (Those are some BS semantics for ya, huh? But it’s true.) You might not be able to afford everything right now, but you can select those things that matter most to you and focus your spending there. When you spend consciously and with intention, determining what is the most important to you, not being able to afford everything will not feel like a disappointment. Appreciate what you have rather than long for what you lack.
SPEND LESS THAN YOU EARN.
This is the #1 rule in personal finance and it’s pretty basic. Spending more than you earn equals debt and spending exactly what you earn is living paycheck to paycheck. How to kick those habits? Budget and track your expenses. I cannot stress enough how empowering a budget can be. Yes, you’re coloring within the lines, but the final product will look amazing. Ready to dive in deeper to my budgeting philosophy?
OPTIMIZE YOUR DEBT.
There are many techniques to getting your debt under control and paid down at minimal cost that I lay down in Budgets & Big Things (just ask my now-debt-free students!). Here’s a brief rundown: Be mindful of the habits that got you into debt before you choose a debt repayment plan. Paying off old debt with new debt (as with consolidations or balance transfers) isn’t often the best idea. I’m a big fan of the debt snowball. Not only does it save you money in interest and fees, but it incorporates money psychology to make the process sustainable. Always remember to be mindful of your own habits and lifestyle before making a debt payoff plan.
UPGRADE YOUR SAVINGS ACCOUNT.
For the past… lotta years interest rates on simple savings accounts have been abysmal. Banks lend us money at rates around 10% (and don’t get me started on credit card rates!) but pay us less than 1% on the money we lend them in our savings accounts? Wow. Not cool. I’m a big fan of internet savings accounts because they pay higher interest rates (yeah, a whopping 1%) but I’m patronizing the bank with the best bang for my bucks. A simple Google search for “best simple savings rates” or “best online savings banks” should give you some quality results to review. Move your money in 2017!
INVEST IN INTANGIBLES.
When we think of investing, we think of dollars and cents and rates of return, but deep down we know that it’s the “priceless” things that matter most (Mastercard, anyone?). It’s easy to get caught up in a lifestyle of perpetual busyness and to keep moving forward on the treadmill of life, but I encourage you to pause and figure out how you can take a little more time to live a well-balanced life you are proud of. And, hey, time is money! Budget your time and money for the things you would regret not having done if you only had a month left to live. Make a bucket list, write your manifesto, and lay down the law to make your life feel good to you! These are the factors to base your financial plan on – not just numbers.
SET SMART GOALS.
I wrote an article a while back explaining why declaring your goals is important but after re-reading it, I need to emphasize that vague goals suck. To stick to a goal, it must be SMART: Specific, Measurable, Attainable, Relevant, and Timely. “Getting out of debt” is stupid (you know what I mean!). “Paying off $5,000 in credit card debt by December 31st, 2018” is SMART! We know specifically what we want to achieve, we can measure that progress in dollars, it’s attainable because the monthly payments are feasible, it’s relevant to the big picture of who we want to be, and it has a timely limit to measure that progress by.
FOR SOME ADDED ACCOUNTABILITY, COMMENT BELOW WITH YOUR MONEY REVOLUTIONS SO I CAN CHEER YOU ON!
Don’t forget to practice patience and be kind to yourself, friend! Change doesn’t happen overnight – it’s a rather slow process that we’ll find ourselves reflecting back on down the road. Give yourself credit for changing direction even if you haven’t reached your destination just yet!
To a happy and prosperous 2018 with no breakdowns of major appliances,
PS. Is 2018 your year for getting your money right? I bet it is! If you ever wished your finances came with an Owner’s Manual and customer service hotline, great news! That’s exactly what I do!
Check out my Financial Coaching program and schedule a free consultation today! I have a couple spots left for January and it looks like one of them has your name on it.