Every year, millions of Americans make New Year’s Resolutions and every year, they essentially make the same 5-10 resolutions. These resolutions generally revolve around getting fit, losing weight, eating healthy, minimizing stress, traveling more and getting their finances in order. Perhaps the reason they keep being the same resolutions year after year is that it is estimated that only between 8-20% of people succeed at keeping their New Year’s Resolutions beyond February. If you want to make 2019 the year you really fix your finances, however, here are 3 tips to get you started.
One of the biggest reasons people fail at keeping their New Year’s Resolutions is that they often set lofty goals without a real, solid, concrete plan for achieving them. One of the best (and most painless) ways to start getting your finances in order is to simply identify where it’s all currently going. Just spending $5 here and $10 there can add up to hundreds of dollars in expenditures every month. Before you can make cuts or set budgets, you need to know where all of your money is going.
Once you know where your money is going, you can start to make a decision about where you want it to be going. For instance, when you actually add it all up, you may be shocked to discover you spend $500 a month or more on eating out. You may want to budget $200 for eating out and direct the $300 you save towards saving up for a vacation or even investing.
One of the primary purposes of getting your finances in order is to free up enough capital to start investing. When you invest rather than just spend, your money starts working for you—or you can start using the money to make more money. There are literally thousands of different ways to invest money that involve higher and lower risk as well as higher and lower maintenance. The choices that are right for you will be largely dependent on what your financial goals are—or what you want to make money for. Whatever your goals are, a financial planner can help you achieve them.
Very few people want to have more money just for the sake of having money. Generally, they either want to travel more, save money to start their own business, buy a house or save up for college or retirement. By identifying what you want to fix your finances for, you create major incentive to stick with it and achieve your goals.
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