If that headline hits home for you, it’s probably because you’ve tried and failed to get your financial life on track in years past. Believe me when I say you are not alone. This is definitely something I’m constantly struggling with too.
Almost everybody has multiple recoveries and relapses when it comes to personal finance. That doesn’t mean that you can’t get it right again and that it won’t stick this time.
The key aspect of your success in 2016 is education. Without having a strong understanding of important aspects of personal finance, all you’ll have to drive these personal changes is desire. Desire without knowledge isn’t very powerful and tends to peter out. Therefore, there are some fundamentals which you should get to know before January 1 rolls around.
- Learn How to Start Investing Right. Getting your financial life in gear isn’t all about covering your bills for tomorrow; it’s about preparing for tomorrow as well. There are many ways to invest, but one of the best is through tax protected methods set up by the government and/or your employers. IRAs and 401(k)s are powerful tools. If they are available to you, try whenever possible to maximize your yearly allowable contributions to enjoy the full power of compound interest over the years.
- Save Money on Your Daily Life. All of us waste money. Life is busy and you probably have a lot on your plate. (Editor’s note: I just spent $18 on airport food. Why why why!?) Being busy is a great way to let money fall through the cracks of your budget. This holiday season, use some of your extra free time (what’s that?) to look for some of these financial inefficiencies and correct them. There are a million ways to do this; here are just a few:
- Spend less on daily purchases by using coupon sites. A new one I just learned about is couponninja.com.
- Review all of your monthly payments, like insurance and cable, to see if you could be saving by switching to another company.
- Sell your car and get a cheaper one that you can pay for in cash.
- Get creative with entertainment and make more friends, saving money simply by hanging out rather than spending on expensive experiences.
- Change Where You Live. Okay, it’s not possible for every person in every situation, but more people should take advantage of this method than actually do. If you live in an expensive area where job options are not the best, why not move somewhere cheaper or with a better economy? There are many cities around the country that offer a better financial climate. Making a move like this can make a big difference in areas of life other than those that relate to your wallet, so take this consideration seriously. It could save you thousands every year, as well.
Sometimes personal finance changes are a big deal. Other times they are easy to implement. Whichever ones are most relevant to you, use the occasion of the new year to make some of this stuff happen for you. 2016 can be the year you get your finances right, even if it’s for the very first time in your life.
How are you going to get your financial life back on track in 2016?
Disclaimer: Cat was compensated for this post, but of course, all opinions are genuine.