4 tips to get your finances in order this New Year
Our family took a bit of a break during the holiday season, so it’s good to be back and to see you here! Between it being H’s birthday and Christmastime with family, December was a busy month.
Now we’re back in the thick of things. And, if you’re anything like me, you have a big of a hangover after the holidays.
No, not that kind of hangover. A financial hangover. Like, “I spent HOW much??” kind of hangover.
New Years is all about resolutions. Most people say they want to get in shape and/or lose weight (that’s definitely one of mine too).
I think a resolution of getting into financial shape is equally as important.
It can be overwhelming though. Maybe you’re staring at a ton of debt. Or you’re living paycheck to paycheck and think you have no extra money to get ahead.
It’s time to use the fresh start of a new year to get your finances in order! Here are a few ways to get started.
1. Start budgeting every penny of your money
Trust me when I say: you will get nowhere if you do not budget your money.
When I blindly spend money, even if I am careful, I get into trouble. Because there are always automated debits, small transactions that “aren’t a big deal”, and other dollars here and there that are spent without thinking.
If you have a strict budget and give every dollar a name, you know where your money is going while you still have it.
That sentence is strange, let me phrase it differently. Allocating your money before it is spent ensures you do not spend without thinking, which ultimately will get you into the same hole you started in. One that is difficult to dig out of.
There are times that we get lazy with the budget and do not allocate our money. And every time we do, I get that same pit in my stomach when starting again.
Because I have to open our bank account and see what we did to ourselves, and where it put us. It always puts us behind.
Making a budget ensures that you will stay on track and get to where you want to be faster!
2. Make a plan for your tax return before it gets here
I don’t mean it should be set aside to pay for that bedroom set you had your eye on that you didn’t buy on Black Friday.
If you want to get ahead financially, you take everything you can to throw at your goal. Whether your current goal is paying off your debt, saving an emergency fund, or whatever you are trying to accomplish, you should do everything you can to achieve it.
3. Pay off your debt
What better New Year’s resolution is there than to pay off your debt? To set up a game plan to rid yourself of compounding interest?
It can seem impossible and just unattainable, but trust me, it is not.
I thought the same before we started the 25 month journey to paying off over $100,000 in debt.
We had every debt you can think of. I was scared. It seemed impossible. But we did it, because we made a plan and had a goal. You can too!
4. Envision what you want your life to look like by the end of this year
Envisioning things can be super powerful for some people. I know it is for me.
I think about what I want my life to look like, or where I want to be in a certain amount of time. Starting the year off by saying where you want to be at the end of the year is a great timeline!
Then, once you have that vision, write up a plan to get yourself there. Do you want to have $10,000 in an emergency fund by the end of this year? Write out how much you have to save per month to get yourself there.
Want to pay off all of your credit cards? Write out how much you have in each account to pay, then start using the debt snowball to knock them out before the end of the year.
Do you feel good financially and want to take your family on a trip? Figure out the cost and how much you need to save monthly (be sure to include when installments are due, in case your booking requires it!). You might even have a picture of your destination hanging for inspiration!
Make this new year all about having a plan for your money. No more blind spending or racking up more debt. Make your money behave for you instead of the other way around!