Depending on your point of view, a glance at the calendar these days can elicit one of two responses: relief that 2016 is finally coming to an end, or panic that you have yet to set resolutions for 2017. While goals related to weight loss and health tend to be most popular each year, the hope to get a better hold on finances usually isn’t far behind. If you’re one of the many Americans looking to change their money-wasting ways in the coming year, here are a few quick tips for you.
Have a budget and stick to it.
Perhaps the single biggest personal finance mistake that many of us make is spending without tracking our purchases. Although just striving to keep your bank account in the black may work for a little while, it doesn’t leave room for error, not to mention emergency. That’s why it’s so important to take the time to create a real budget for yourself.
Luckily, this process has now been made less painful as several apps (e.g. Mint, YNAB, and GoodBudget) allow you to set spending limits and will automatically categorize your purchases for you. Of course, you can always keep a spreadsheet of your own as well or use one as a backup. Lastly, if your addiction to plastic is really getting the best of you, try using the old school envelope method where you put cash (yes, cash) into folders labeled with each category of spending. Once your cash is gone, that’s it. You’ll quickly learn what areas you need to work on.
Up your 401(k) contribution.
With another year over, you are now another year older. Sorry to bum you out but it’s important to consider. Even though retirement might seem like an eternity from now, the truth is that you still need to be saving for it. One of the best ways to do that is by contributing to a 401(k).
What’s great about 401(k)s is that in many cases your employer will match a certain percentage of the contributions you make and might also offer profit sharing. If you’re not taking advantage of this “free money,” you really should be. In fact, now is a great time to change your withholdings as open enrollment traditionally takes place at the beginning of each year.
Save more on your purchases by planning ahead and getting creative.
Impulse buying can lead not only to some ill-advised purchases but could also cause you to spend more than you need to. There are several ways to save money on the things you buy, but most of them involve planning.
As someone who visits the mall on a weekly basis, one my favorite ways to save is to find an item I want, set a target price I’d be willing to pay for it, and then wait until it is marked down enough for me to buy. While that may be time-consuming, running a Google search for a coupon code before buying something online is super-fast and oftentimes very effective in helping you reach that important target price. Lastly, don’t forget to be creative and use loyalty offers, credit card rewards, and regular old coupons to your advantage— even all at once!
Start an emergency fund.
Speaking of planning, if 2016 taught us anything, it’s that the unexpected can happen. That’s why having an emergency fund is paramount to ensuring your financial security. Furthermore, in addition to having enough saved up to cover three to six months of essential bills should you lose your job, you might also want to consider having a separate fund for things like car repairs. With these savings in place, you’ll be able to make it through tough financial times without resorting to credit cards. If the worst does happen, you’ll be very thankful you were prepared.
Consider a side hustle.
Obviously saving money is a big part of personal finance, but so is making money. Luckily, thanks to the Internet, you can now monetize more possessions, talents, goods, and services than ever before. As a result, maybe it’s time you considered pursuing a side hustle of your own. Whether that means blogging about your passions, using some of your free time to drive people around town, selling items you create yourself, or renting/selling items you don’t need, you may be surprised by what you can do and what you could earn. Why not give it a shot?
Happy New Year, everyone — here’s to a great 2017!