5 Financial Habits To Kick Off Your New Year
New Year’s resolutions. Some people love them, some people hate them, but no matter what camp you fall under, it’s hard to argue that the start of a brand new year is a great time to identify goals and implement new habits. Maybe you don’t need to use the label of a resolution, but setting some clear and actionable goals for the year ahead will help keep you on track and moving towards Financial Freedom.
Here’s 5 idea’s to help you formulate your own 2018 Financial Goals:
1: Request your credit report.
So may of us are guilty of never actually requesting our credit report, let alone understanding the nuances of what contributes to our overall credit score. In fact, many of us assume that because we’ve never been late on a bill payment that we must have a perfect credit score. But that’s not actually how credit scores are calculated, not entirely anyway. Credit scores evaluate more than just your past history of paying on time. They take into consideration your overall credit profile, what types of credit you have, how often you apply for credit, the percentage of available credit that you utilize, the length of time you’ve had the credit accounts etc. There’s a lot that goes into that little three digit number, and it’s worth taking the time to understand it. Making a credit report request annually can accomplish a couple things. It can identify types of credit products that would help improve your score. And more importantly, it’s an excellent way to identify any credit that has been fraudulently extended in your name so you can take quick action to correct it. You can easily obtain a copy of your credit report from companies like TransUnion or Equifax.
2: Read your benefit plan/health insurance coverage
Way to many people have no idea what exactly their plans cover. Nor do they take advantage of their health benefits to the fullest. By reading and understanding the fine print you can be prepared if you need to access those benefits. Knowing what’s required of you will ensure you take proper steps when a medical need arises so you don’t find yourself out of pocket. Also, if you have benefits through your employer, USE THEM. They form part of your compensation package, so use them to the fullest. Have an alotment for massage therapy? Use it. Access to a nutritionist? Go. Annual eye check-ups? Get them done. Don’t nevessarily wait for something to go wrong, use these benefits to their fullest in order to be proactive about your health and well being. Doing so could save you big over the long term.
3: Switch to cash for a month
I’m normally a huge proponent of using credit cards for all purchases. But only, ONLY, if you have excellent spending habits and never actually buy anything with money you don’t have. If your spending could use some improvement, or even if your a well disciplined saver who just wants to go the extra mile, try switching to hard cash. In this ever increasing digital world we are getting further and further away from feeling that tangible sensation of money leaving your hands. Tapping a credit card, your watch or your phone just doesn’t come close to evoking that same degree of awareness during transactions. So get back in touch with the reality of the numbers and spend only cash, you’ll think twice when you have a finite amount sitting in your wallet. It also makes impulse purchases a whole lot harder.
To go along with the switch to cash, track your spending. Every single penny. And don’t use some easy app that does it for you. Use a ledger that requires you to make an entry, every time you buy something. The sheer fact that you know you’ll be creating a little work for yourself each time you spend will make you that much less likely to buy. At the end of the month take a hard look at where your money went. Use your ledger as a tool to highlight what you can get by with in your spending budget, and identify areas that can be trimmed down.
4: Meal Plan Once A Week
Pick one day a week, and plan your meals for the following 7 days. Write your grocery list based on that meal plan (while in front of your pantry/refrigerator to make sure you don’t double up on items you already have). Start by planning dinners that leave you sufficient left-overs for lunch the next day. By building left overs into your plan, you’ll minimze the number of meals you actually have to prepare and cook. Try to pick meals that use similar ingredients throughout the week. IE: if you make one meal that requires sour cream, but you’ll only use half the container, try to plan a second meal that calls for the rest of it. You’ll save money, and waste less food. Not to mention you’ll eliminate the annoyance of constantly trying to figure out what’s for dinner.
5: Read One Financial Book a Month
This goal is all about increasing your financial acumen. Continuing education should be a constant for anyone seeking Financial Freedom, and one book a month is very doable, even with a packed schedule. From investing, to pension structure, to tax efficient savings accounts, having a better understanding of finance is always a worthwhile investment of your time. (But please don’t go and buy the books you choose to read. At an average of 20-30 bucks a book, thats an extra $240 – $360 you don’t need to spend this year. So save your money, take a walk down to your local library and if you don’t already have one, sign up for a library card. Instant access to a wealth of financial literature, all for free.)
Hopefully this list will help you jumpstart your own ideas for habits and goals to implement in 2018.
Here’s wishing you all a very Happy New Year, and a prosperous 2018!!