Better Finances for the New Year

a business man sorting out his $100 dollar bills into three piles on a table

This is it!  This is the year you will be wiser with your money.  You plan to spend less than your income and to save money instead of falling further into debt.

Over half of Americans (55%) say they spend more than they make or just break even,1 which is probably why a third of resolutions are money related.  Unfortunately, 25% of resolutions don’t even survive the first week.2

This year, start off right with a few steps (mini resolutions, if you will) that will help you improve finances for the new year.

Plan for Irregular Expenses

Oftentimes, people are tempted to fall back on their credit cards and spend more than they can afford when they have an irregular expense that they didn’t fit in the budget.  It could be something like your car registration or your spouse’s birthday – things that don’t happen each month but do happen every year.

Instead of waiting for those expenses to come around and hoping you haven’t used your whole paycheck for the month, plan for it now.

Start by taking out a calendar.  As you look at each month, note the birthdays and holidays and other yearly expenses, and write down the amount you might possibly spend.  (Not sure how much?  Take a look at credit card statements and bank account records to see how much you spent last year.)  Then, use those amounts as starting points for planning and saving.

For example, say you noted that your nephew is graduating at the end of May, and you want to give him a brand new one-hundred dollar bill.  With his graduation roughly five months away (and assuming you get paid twice a month), all you have to do is save $10 from each paycheck between now and your nephew’s graduation.

Get a Financial First Aid Kit (a.k.a. Emergency Savings!)

Emergency funds are for the unforeseeable events, like your car breaking down on the freeway or losing your job.  Such a major event will knock you off balance if you’re not prepared financially.

Although an initial goal for your emergency savings account could be as low as $1,000, the ultimate goal would be to have at least three to six months (or more) of your fixed monthly expenses.  Once you have  your goal in mind, take a look at your budget and figure out how much of your paycheck you can allocate toward emergency savings.  For example, if you want to have $1,000 in emergency savings by the end of the year, you would allocate $84 a month towards emergency savings.

Remember, the first (and perhaps, most important) step is getting started.  Eventually, saving money will become a habit, and it will be easier to contribute more and more.

Work with a Personal Cheerleader

It’s much easier to keep going when you have someone cheering you on and holding you accountable.  An accountability partner should be someone who can hold up your list of resolutions, wipe away the doubt, and help you move forward when you get stuck.

Your Money Coach is the perfect fit.

Money Coaches are financial professionals with years of experience.  Together, you will devise a budget that takes all things into account and develop a step-by-step plan to achieve your goals.  You can work on items like a debt management plan, learn how to save for irregular and emergency expenses, and feel good about your spending.

People who work with a Money Coach find the support and expertise to be key for achieving their goals.  One member said, “[My Money Coach] is my accountability – and I mean it in the best way….  He continues to be my rah-rah team and is a constant support.  I am successful because of his guidance and confidence in me.”

If you would like an accountability partner who is knowledgeable in finances and knows how to manage money in everyday life, talk to your Money Coach.  With a Money Coach by your side, you’ll be less likely to face surprises that derail your financial goals.

Call 888-724-2326 and get ready to check off your New Year’s resolution for better finances.

1Financial Security and Mobility.  “Pew Survey Shows Americans’ Financial Worries Cloud Optimism:  Sense of Improving Conditions Outweighed by Feelings of Insecurity.”  pewtrusts.org.  Washington: The PEW Charitable Trusts, 5 Mar. 2015.  Web.  19 Aug. 2015.

2University of Scranton, Journal of Clinical Psychology