2018 is here and the past year has flown by. Your finances are probably the last thing you want to think about during the holidays, but if you haven’t got a plan for the new year, how do you expect to get ahead? Now, is the perfect time to re-assess your financial situation so that you can earn and save more next year. Here are 5 ways to start 2018 on the right financial track.
1. Assess Your 2017 Spending
Before you can figure out a solid plan for 2018, you need to know what you did this year. Ask yourself the following questions:
- What progress did you make with your money?
- How much debt did you pay off, or did you go into debt?
- What big-ticket items did you purchase?
- How did your investments perform?
- What changed in your family or living situation?
You might have additional questions that you need to ask, as your finances will depend on your particular situation. Be clear and honest with yourself, as this is the foundation you need to build your finances on in the new year. If you have a partner, do this together to make sure you are on the same page.
2. Know Your Goals
Now that you know where your money went in 2017, you can make goals for next year. The easiest way to do this is to take large goals and break them down into more achievable chunks. For example, if you want to save $10,000 this year, break it down to 4 goals of $2,500 – it’ll feel easier, and you’ll meet smaller goals quicker which will motivate you to save more.
3. Make Debt Your Top Priority
If you are in debt, choose 2018 as the year you are going to become debt-free. The hardest part of paying back debt is making the choice to do it. Many Americans are content to live with debt, but it’s hindering your finances at every turn.
Attack your debt this year with a serious strategy, especially if it’s high-interest consumer debt. Depending on what kind of debt you have, we’ve written about 6 apps to help you tackle debt. From the snowball debt repayment method to student loan forgiveness, we’ve got you covered.
4. Find One Thing to Monetize
There’s no better way to boost your finances than by creating a new stream of income. Extra money helps whether you are trying to pay back debts, travel, or max out your retirement savings plan. There are a huge number of side-gigs or work-from-home jobs that you can use to increase your cash flow.
If you’re hoping to hit a financial goal in 2018, increasing your income will give you the best chance, and once you’ve destroyed your debt, you can turn that goal into a reality.
5. Establish a Plan
The final thing you should do before the new year starts is to make a plan. The plan will give you a sense of direction – just make sure you break up your goals into chunks for the greatest possibility of success. If you’re paying off debt, commit to a balance that you can repay and then figure out how many months it’ll take. The same can be said for your retirement savings, mortgage down payment or travel money.
If you need help sticking to your plan, ask a friend to keep you accountable and check-in on your savings. If your friend has saving or debt repayment goals of their own, you can help them, too.