If you’re like many Americans, you are concerned about your financial future. Whether it’s your bank balance or retirement portfolio, your primary goal is to find ways to increase your net worth and decrease your debt load. It’s never been a better time to focus on improving your personal finances. This is especially true as you embark on a new year. New Year’s Eve is almost here and if you’re like many people – you’ll reflect on the New Year’s resolutions you made at the start of the year and wonder where you went wrong, specifically in the finance area. Many of you had high hopes for increasing savings this year but, things got in the way, and you fell short. Here are some actions you can take to improve your finances in 2019 and make it a better year.
Can you figure out why you are overspending?
Obviously the best way to save is to stop purchasing things that you cannot afford. There’s a difference between looking rich and being rich. Purchasing expensive clothes, cars and jewelry that you can’t afford won’t benefit you in the long term. Collectively, Americans are in over $1 trillion dollars in consumer debt. Unfortunately, much of this debt can be attributed to a large number of people who supplement their lifestyles with credit cards, personal loans and other debts. Be honest with yourself in 2019 and try to figure out why you are overspending, then take action and make changes.
Your spending habits depend on your mindset. Have a real, honest discussion with yourself about your spending. Some people may need to speak to a professional and get assistance. Others, may be able to change on their own. Address the real issues behind your spending to make some long-term changes and avoid pain later. Examine your feelings, reflect on your emotions and how you may be using shopping to sooth negative feelings. Can you call a friend instead or find other self-soothing rituals? Figure out what makes you happy and do more of that, instead of spending money. Are you trying to keep up with the Joneses? You may discover that many Americans live beyond their means. Chances are, your neighbors are struggling to keep up too and living beyond their means. For every purchase you make in 2019, examine your motives. What’s really behind the constant need to spend?
Can you chip away at some debt?
What do student loans, credit card bills and mortgage debt have in common? These types of debt make it difficult for you to save for the future and fund your retirement account. In some instances, taking on short-term debt is necessary. However, this doesn’t mean that you shouldn’t strive to pay the debt off as early as possible. Make a list of the companies (and people) that you owe. Devise a strategy to pay off the debts. As you’re reviewing your debts, resist the urge to become overwhelmed by the amount of money that you owe. Prioritize the debts in your repayment plan. Focus on repaying one debt at a time.
Can you create a source for additional income?
People who have learned to master money know that it’s essential to have several streams of income. In this economy, having one job may not be enough to pay the bills and get ahead. Here’s the truth about personal finances that many financial gurus don’t tell you. It’s impossible for you to save your way into wealth if you don’t earn enough money. Increasing your income is no longer an option – it’s a necessity. Think of things that you can do today that will increase your income. The great thing is you don’t have to quit your job to earn additional income. There are plenty of things that you can do to supplement your income in your spare time.
- Got skills? Become a tutor.
- Own a reliable car? Join a ride share service.
- Possess impressive writing skills? Become a freelance writer.
Can you increase your credit score?
If you have to borrow money for any reason, it’s best to get a loan at the cheapest rate. When you have good credit, you have that option. When your credit score is less than stellar, you’ll pay more for the money that you borrow. That’s a good reason for you to take measures to improve your credit score. One way to improve your credit score is by paying old debts. Another thing you can do is apply for new credit and pay your bills on time. Living on credit is never a good idea. However, it’s always good to be able to get credit if you need to purchase a home, car or rent an apartment.
Can you set aside a few hours a month to educate yourself about money?
When it comes to money, many people don’t have a clue about how it works. That’s part of the reason that less than 40% of Americans have less than $1,000 in their bank accounts. To improve your finances, you must increase your financial IQ. Here are a few ways you can do this.
- Read financial books.
- Attend personal finance seminars.
- Meet with a financial advisor.
- Listen to personal finance podcasts.
Don’t let finances intimidate and control you. 2019 can be a great year if you improve your financial situation. By taking these steps, you can crush your financial goals next year!