Make 2017 the year you finally get your finances in shape! (Sure we’re already halfway through, but better late than never, right?) Here are five tips to help you financially succeed this year.
- Create a Budget
There is no way you will be financially successful if you don’t create a budget. A good rule of thumb is to keep lifestyle spending at a maximum of 30% of your monthly income. Then, use a minimum of 20% of your monthly income on any financial responsibilities, and put whatever you have left over in a savings account.
- Only Use Cash
While credit and debit cards are convenient, they subconsciously encourage reckless spending. Just think about it: how many times have you overspent, shrugged it off, and simply didn’t check your account balance? But when you use money, you’re forced to acknowledge how much you have and how much you can spend. All of a sudden, you will see yourself become more frugal and cautious of how you spend your money.
- Set Financial Goals
Unlike most goals, only use numbers to describe your financial goals. For example, write down your goal of saving a certain amount of money by a certain date. If you really need motivation to achieve your goals, give yourself a small reward if you meet that goal.
- Check Your Progress Daily
Achieving your financial goals might take a while. It’s important to stay motivated, avoid discouragement, and stay on track. So, check your progress on a daily basis. Not only will this help you see how far you have come, but it will also help you identify any possible problems you could tweak to speed up the process of achieving your goals.
- Think Before You Spend
Stop impulse buying. It’s unhealthy and financially damaging. If you happen to slip up and impulse or emotional buy, simply return the item the next day. But, the goal is to never impulse buy. A good way to stop impulse purchases is to run through a few questions before you purchase the item, such as:
- Do I really need this item?
- Will I still want this item a week for now? A month from now? A year from now?
- Is this item worth more than reducing my debt or taking my expensive vacation next year?
- Will I use this item more than a few times?
If you answer no to any of the above questions, then you shouldn’t purchase the item.