3 Bite-Size Tips to Stick with New Year’s Financial Resolutions
1.Create a Spending Plan
2.Stop Using Credit Cards!!
3.Build a Beginner Emergency Fund
Create a Spending Plan
When creating a spending plan, the biggest obstacle is making up your mind to making a change and sticking to it. A lot of people think it takes hours to make a spending plan when it reality it doesn’t. In fact, you can create your monthly spending plan in as little as 15 minutes!
To create your monthly spending plan, the first step is to list all your monthly income. Then you will know how much you have to spend that month. The next step is to get all your monthly bills and expenses together: Food, Shelter, Utilities, etc… Total all your expenses and subtract that from your income. If the total is negative, you have to make cuts. If your total is positive, you can add to your spending plan, work to build your beginner emergency fund, or sending more money to debt.
If you need help creating your spending plan, my book Bite-Size Budgeting: Making Your Budget Work for You was written so you could take your first steps toward financial success.
Stop Using Credit Cards!
All credit cards do is put you further and further in debt. When you stop using them, your debt level starts going down because you’re paying on them but no longer adding to the hill of debt. Debt is the biggest threat to your financial future as debt robs you of your future you! Stop using credit cards and instead use cash or your debit card. If you don’t have the money to pay for it, don’t buy it! And before you say to yourself “everyone uses a credit card” or “you can’t buy things without one”, I haven’t used a credit card in over 15 years!
Build a Beginner Emergency Fund
When you have an emergency fund to cover unexpected emergency expenses, you have a financial cushion. To get started, have a $1000 beginner emergency fund while working on getting out of debt. What this does is it gives you the cushion to pay for emergencies if they happen while you’re working your way out of debt. Obviously $1000 won’t cover every emergency, but it will cover the unexpected plumbing repair, car repair, etc… The funny thing is, once you have the $1000 in place emergency expenses generally stop happening. If you have an emergency and have to use any of your beginner emergency fund, then work to rebuild it as fast as you can. Ways to get your beginner emergency fund started can be found here.