I love the start of a new year. It’s a fresh start, a clean slate, and a chance to make positive changes.
If you struggled with your finances last year, then let’s start fresh. Let’s stop putting ourselves in that fight or flight mode when it comes to our money. Let’s make some smart money moves this year. If you make these moves this year, you’ll put yourself on better financial ground and reduce your money-related stress.
Smart Money Move #1: Establish an emergency fund.
If you’re ever going to break the cycle of turning to credit cards every time something breaks or someone get’s sick, you’re going to need an emergency fund. Financial advisers often say you should have enough money saved to cover 6 to 8 months of living expenses. They recommend this because it would help you survive a short stretch of unemployment or debilitating illness. I think it’s an excellent goal to work toward, but if you don’t have any money saved it can be a daunting goal. Instead, start by striving to save $1,000. That $1,000 emergency fund will cover most surprise car or home repairs that crop up. And saving that first $1,000 will help kickstart a money mindset that can help you grow your savings even more.
Smart Money Move #2: Set a budget and stick to it.
Take a good hard look at how much money you have coming in and what’s going out. Where are your money leaks? Start tracking your spending with a spreadsheet or budgeting software to help you figure out places you can find money to save. A plan to save is a plan to stay out of debt.
Smart Money Move #3: Stop keeping up with the Joneses.
Give yourself permission to stop caring what other people are spending their money on. That means we’re not going to be jealous of the beach vacation the neighbors took. We’re not going to fret about how it will look if we don’t spend a fortune on Christmas. We’re not going to stress about keeping up appearances. Instead, we’re going to remember our financial goals and find ways to enjoy life without spending a fortune.
Smart Money Move #4: Start contributing to a retirement fund.
The average working American has less than $30,000 saved for retirement. You can’t assume you’ll be able to keep working into your 70s, and you can’t expect Social Security to begin to cover your expenses. Start setting aside a little bit of money each week in a retirement account. The earlier you start, the more time your money has to grow. Can’t find the money to save for retirement? Look toward stopping those money leaks in your budget, or consider finding ways to make a little extra money on the side.
Smart Money Move #5: Take care of yourself.
One of the best ways to protect your personal finances is to start taking care of yourself. That means you need to do things like maintain a healthy weight, quit smoking, and get some exercise. Find low-cost ways to reduce your stress. A healthier you is a less expensive you, and helps create a positive outlook that can help you make smarter financial decisions.
These are just a few of the smart money moves you can make to take control of your personal finances in the upcoming year. Start fresh and start today.
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