Financial fitness is not about how much money you make; it's how much you keep. Take stock of your finances and build healthy habits in the coming year.
1. Live within or below your means.
Don't spend more than you earn each month. If your monthly take-home pay is $4000, spend less than that and save the rest.
2. Take a break from spending.
Designate one day a week when you don't spend money. For example, take your lunch to work instead of eating out.
3. Take a moment to check your balance.
Take a minute and review your checking account balance regularly to avoid an unexpected overdraft.
4. Use credit cards wisely.
If you want to make a larger purchase, like a plane ticket, only do so if it'll take no more than three months to pay off.
5. Use a budget.
A budget can help you track spending and plan for big purchases, like a vacation or a down payment for a car loan.
6. Pay yourself first.
Putting away even $25 a month can add up over time. Set up an automatic monthly transfer of money to a savings account.
7. Reduce impulse buying.
Make a list before you go shopping and stick to it. When tempted to purchase something, write it down and see if you still want that item a month later.
8. Create a rule of thumb.
This is a personal belief that can keep you on track toward your monetary goals. For example, if you're tempted to make an unplanned purchase, tell yourself to "pay the credit cards first."
9. Give yourself a raise.
If you contribute to a retirement account through payroll deduction, increase that amount at the start of each year. Even a 2% raise each year makes a difference.
10. Pay bills on time.
Making late payments can be costly. Some credit cards charge late fees of $30-60.
11. Be accountable.
Tell a friend about your financial goals. Give them periodic updates on your progress.
12. Pay cash.
Borrowing money to buy a house or car can be good, but hold off on smaller items if you can't pay with cash.
13. Plan for the long term.
Do what you can to put away money for the future. It's important to think about your long-term security.
14. Pay your bills early.
Paying a credit card bill early can keep that hefty interest from accruing.
15. Plan for emergencies.
Cars break down. People get sick. A savings account that is just for emergencies can help you get through the hard times.
16. Replenish the emergency account.
Make sure you have enough to account for cost-of-living increases. Don't forget to replace the funds you've taken out.
17. Plan for the good stuff, too.
Is there a new car or a European vacation in your future? Make sure you have the funds to realize your dreams.
18. Turn off the TV.
Much of our impulse spending comes from what we see on TV.
19. Remove redundancies
If you subscribe to Netflix and pay for cable TV, get rid of one of these expenses.
20. Balance your checkbook.
Electronic banking can make this easy to forget. But keeping up this habit will help you avoid pitfalls.
21. Get the best value for your money.
Something that is expensive isn't necessarily good value for your money. Instead of buying a brand new car, can you get by with a reliable pre-owned car?
22. Increase your payments.
Pay more than the minimum amount due on credit cards to get to a zero balance sooner.
23. Take care of your stuff.
Maintaining your equipment, such as changing the oil in your car, can help you avoid expensive repairs.
24. Just say "no."
Don't be afraid to tell yourself "no." Buying something on impulse every time you're out can add up.
25. Go for the term.
Life insurance can seem expensive. Consider a term policy, which has lower premiums.
26. Watch mortgage interest rates.
Even after you've bought a home, continue to watch for opportunities to refinance for a better interest rate.
27. Keep it to a minimum.
Try not to carry a lot of cash. The less you have on hand, the less you'll spend.
28. Know what you're paying.
Do you know exactly how much you're paying in fees, such as for investment services? Also, know the interest rates on the credit card balances you're carrying.
29. Mistakes happen.
Look at your bills and review all charges and to make sure you're not paying extra because of errors.
30. Don't beat yourself up.
An occasional slip-up won't ruin your finances. It takes a while for new financial habits to take hold.
This is not legal or financial advice. Please consult a legal or financial advisor for your specific situation.