Happy New Year!

At the start of every year comes the opportunity to set new goals to get our lives in order, be more creative, and reinforce our focus on the things that matter most. These goals cover everything from our faith, family, and fitness, and the one we typically gravitate toward is getting our finances in order.

January is Financial Wellness Month, and now is an excellent time to be honest about how you manage your finances and pay closer attention to your financial well-being. You may want to do the following to set yourself up for success in 2024:

1. Be Committed. The first and most crucial step to getting your finances in order is to examine your attitude about money and become proactive in changing how you make your financial decisions. You can evaluate your strengths and weaknesses by writing down your findings in the areas where you need to improve financially. Also, this is a good time to identify at least one benefit you hope to gain by changing how you manage your money. For example, getting your finances in order can reduce stress and worries, often leading to a more balanced life and better overall health.

2.  Make a budget. Take a long, hard look at how you spend and manage your money. Creating a monthly budget is the foundation to help you gain control of your finances. Also, it helps improve your spending habits and can be used to track and avoid incurring additional debt. Furthermore, a budget will give you an accurate picture of the money you will have and need for the future.

   There are plenty of online apps and spreadsheets to help assist you in creating a budget. If you’re uncomfortable using technology, use a pen and notepad to create a budget. You should select a budgeting tool that works with your routine and personality because if you begin using a complicated one, you could quickly and easily become overwhelmed.

3. Focus on using cash versus credit. Paying with cash or using a debit card is essential to getting your finances in order because you put a limit on yourself. When the money is gone, it’s gone! Research has shown that we spend 15 percent more when paying with a credit card than using cash. To avoid making impulse purchases, leave your credit cards at home.

4. Negotiate your bills. Call your internet, cell phone, and other service providers, and ask for a better rate. The best way to get a better rate is to research the lowest going rates in your area, either the price your provider offers to new subscribers or rates offered by the competition, and use that price as leverage in your negotiation. When you call, ask to speak to the retention department, as this department usually has the authority to give you a better rate.

5. Set short-, mid-, and long-term goals. Goal setting is integral to developing your financial plan, and having clear financial objectives will make it easier to focus on reaching them. Achieving your financial goals will differ in length and time, so each goal must have a specific purpose, a dollar amount it will cost, and a realistic target date to achieve that goal.

    

   • Short-term goals are priorities achieved within two years, such as planning a vacation or wedding or saving for a car down payment.

   • Mid-term goals are achieved in two to five years. Some examples include saving for a down payment on a house or paying off a sizable student loan.

   • Long-term goals are priorities that take over five years to achieve, such as saving for a college education or retirement.

6. Start an Emergency Savings Fund. If the last few years didn’t teach us anything else, it should be that all of us had better be saving for the unexpected. Unforeseen events happen all the time, and nothing ruins your finances quicker than debt from an illness, loss of a job, or an emergency. You can keep a minor financial setback from turning into a major crisis when you prepare for the unexpected by having an emergency savings fund.

   Consider putting money into a high-yield savings account, which offers a chance to earn compound interest while still giving you easy access to your cash. It's best to put away up to three months of living expenses and then increase your savings, over time, to nine to twelve months or an amount tailored to your unique life circumstances.

7. Review and pay down your debt. Freedom from debt is achievable; however, the first step in regaining control is to look at your current financial obligations and get copies of your free credit reports at www.annualcreditreport.com. There are several different approaches to paying down debt:

    

   • Pay the lowest value balance first.

   • Pay the highest-interest debt first.

   • Consolidate your debt.

   • Pay more than the minimum amount due.

   • Cut spending elsewhere and use the surplus towards the debt.

    

   Choose one or use a combination of approaches to pay down your debt. Paying extra above the minimum due amount is the key to helping you eliminate your debt faster.

8. Start or continue to invest for retirement. If your employer offers a workplace retirement plan, take advantage of the ‘free” matching dollars they provide as a participant in the plan. Also, review your current portfolio fund lineup, including performance and fees, to see if you’re utilizing the best options.

9. Have an accountability partner. It will be much easier to stay focused and on track when you get a family member or friend to help hold you accountable. Also, asking them to participate in tracking their finances will keep you motivated because you’ll be working as a team.

10. Be Patient. We adopt certain patterns about managing our finances because someone has taught us directly or by example. Instead of mindlessly following the example of others, ask God to give you a vision for your life. He will, and when He does, pour yourself into it. Just like when training to run a marathon, reaching your goal of getting your finances in order will take passion, energy, focus, work, and time. However, with a few changes, you can say, "I did it" a year from now!

Here’s to good health, happiness, and peace in 2024! Let’s do this!

Livia

aka Livia Kelly (Author)

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Livia Kelly is the Author of Unmarried and Debt-Free. Livia's book has made Amazon's #1 Best Seller list in Personal Budgeting and Two-Hour Self-Help Short Reads. Her goal is to simplify finance by providing sound and useful guidance about achieving financial success on your own. More information can be found at https://www.liviakellyauthor.com. Follow Livia on Facebook and Instagram @liviakellyauthor.

📸 Credits: Getty Images / Nicole Tyler