5 tips to make this year the best fiscal year

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    New Years Resolutions

    Nearly 75% of Americans make New Year’s resolutions, and the third most common resolution is related to finance. The second most common is also self improvement, which frankly goes hand in hand with what we’re talking about here.

    Whether you’re looking to reduce debt, save more money, hit a cash goal like a vacation or buy a house, or even build enough cash to quit your job, we’re making this year your best fiscal year yet.

    Unfortunately, most of the resolutions are also broken. This year, however, will be different. This year you will keep your promise and improve your finances. Here are five tips to help you achieve success over the next 12 months.

    1. Get organized

    Regardless of your New Years resolution, you will NOT be successful unless you organize. Some people call this budgeting, but this is the pre-budgeting step. Seriously – just get organized.

    That means an exact inventory of everything:

    • Income – what’s coming (every month)
    • Expenses – what’s out (any money)
    • What You Have – Assets and Account Balances
    • What you owe – all of your debts, balances, and the minimum monthly amount

    Would you like a tool to help you? Check out this list of the best money and budgeting apps.

    You also need to take stock of your time using your calendar. This is what most people miss – do you know exactly where you spend your time each day / week / month?

    After all, you need to spend a little time thinking about what is important to you. What are the most important things in your life? Do you spend time with your family? Voluntary work? Work? Sports? Vacations? Figuring out what you value most (and probably the 3-5 most important things) along with things you don’t value goes a long way in organizing your finances so that it works.

    Then what?

    Once you are organized, you can really start making effective decisions that will help you achieve your New Years resolution or other financial goal. I’m not here to tell you what to do, it’s personal. But when you have everything prepared – your income, expenses, time, and values ​​- you can start making decisions.

    For example, if your goal is to pay off debt, look at your income and expenses and see what the «delta» is (the difference between the two numbers) and use this extra to start paying off your debt.

    Don’t have a delta? Well then start looking line by line on both your income and expenditure side. Can you make more money (this may also require a look at your calendar and time)? Can you cut spending (this may require looking at what is important to you and if you are wasting money on things you do not appreciate)?

    The fact is, money is personal. There is no right or wrong answer here – but the truth will match a combination of income, expenses, time and values. If you want a bigger budgeting guide, check out this: Budgeting For Your Personality and Style.

    2. Boost your credit

    Regardless of your resolution, improving your credit will be a crucial factor! Do you want to save some money? This helps. Looking for a new job? This helps! Would you like to buy a house or rent an apartment? This helps!

    Credit score range

    This step actually requires several substeps. First of all, you want to clean up your balance. Order a credit report (you can do this for free at AnnualCreditReport.com). You may find some adverse information that will lower your credit score. Next, fix the bad credit that was listed on your report.

    For example, deny any negative information that is not true, such as: B. Late Payments. If you are looking to repay creditors listed on your credit report, make sure the debt is not considered zombie debt. Zombie debt is too old for creditors to sue or even contact you over the statute of limitations. If you contact the obligee about the debt, the statute of limitations begins again.

    You can also read our full guide on How To Improve Your Credit Score.

    3. Build up your supply

    One of the most common financial goals after paying off debt is saving money. Whether you’re building an emergency fund, saving for retirement, or saving for a goal like a home, building your cash supply is key.

    Side note: It doesn’t have to pay off debts OR save. You can try to do both at the same time. In fact, you probably should!

    Saving account: You would like to open or use your savings account. The account is a way to save money. For example, you can use the account to set up an emergency fund. You can choose to have a debit card or limit access to it by not having one. Open an Account Here: The Best High Yield Savings Accounts.

    IRA: An IRA (or Individual Retirement Account) is a great tool to save for retirement. There are some IRA income and contribution limits, but if you qualify, take advantage of the benefits! Check out the best places to open an IRA here.

    401k: If your employer offers a 401k, be sure to use it! In fact, many employers offer «equal contributions» – that’s FREE money your employer gives you for retirement. By not using it, you are essentially accepting a cut in salary.

    4. Pay yourself first

    You may think that this year isn’t the way to get out of debt (or hit any other money goal), but it does. It is easier to get into debt when you are constantly spending money. But this is a big change in the way you think about how you distribute your money.

    For example, say you want to go to the movies or go out to eat with friends. You don’t have the money, so you put one of your credit cards on it. If you pay yourself first, you can have money to do the things you want to do. More importantly, you don’t run into any new debt. Go ahead and pay yourself.

    After all, you are the one who works hard to make your dreams come true. The easiest way to pay is with a separate savings account. If you have a direct deposit, you can have a small amount transferred to this account.

    5. Live with your means (and values)

    We all want things we can’t have. For example, you might want this 65-inch flat screen TV. However, you cannot afford it. The debt free thing is to save up for it or not to buy it. Living within your means requires big changes – and spending your money around your values.

    At a basic level, you can:

    • Stop using savings or credit cards for things you really can’t afford.
    • Create a monthly budget based on your income.
    • Track your expenses.
    • Pay bills on time.

    But when it comes to compromising, you need to get back to your values ​​and see what is really important to you. You may feel like you need that 65 inch TV, but what if watching TV isn’t something you especially do or enjoy? Perhaps that money shouldn’t be spent, or maybe it needs to be used on something else that you really value.

    Bonus tip: look for free cash

    As a bonus reminder, I always want to encourage everyone to find the free money in their life. You will be surprised how much free money you might be entitled to. I recently found $ 100 that Wells Fargo owed me on an old account they closed (and never contacted me).

    Plus there are plenty of offers and bonus incentives for things you are already doing! Perhaps you wanted to open this current or savings account this year? Did you know that banks only offer you bonus offers as a customer? If you wanted to sign up anyway, you get paid for it!

    In the meantime, read this guide to find free money.

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