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6 Financial New Year Resolutions You Need To Make For 2015

6 Financial New Year Resolutions You Need To Make For 2015

Okay guys, we’re officially a few days away from 2015, so it’s time to put your pen to paper and write out your New Year’s resolutions. I’m a big fan of this tradition because I think we all have areas in our lives that can be improved with a little work. While many people have their eyes on getting into better physical shape, I would suggest also getting in better fiscal shape in 2015. Here are some resolutions you can make that will set you up for success, and if your other resolutions don’t hold up (because who really wants to go to the gym in March anyway?) you can at least point to having achieved these!


Make A Budget

Budgets are a great tool that can keep you on track to reach your financial goals. They also raise a red flag for you when you might be overspending, or let you know when you might end up with some extra cash at the end of the month. When building a budget you’ll need to first list your income streams and then your expenses. Over the course of a year, your expenses should be lower than your monthly net income stream. If not, then you’ll need to figure out how to either lower your expenses or up your income. When building out your budget remember to pay yourself first, meaning you should have a line item for savings. For tips on creating a budget, check out my article here.


Fill Your Emergency Savings Bucket

Do you have enough money in your emergency fund right now? You should have enough money to pay for six to twelve months of your fixed expenses. If you don’t have that amount right now, that’s where your savings should go first before saving for a vacation or even paying down debt. You should also keep this money so that it is easily accessible, like a savings account or money market. This money should only be used for true emergencies such as job loss or medical costs.


Pay Down Debt

Debt isn’t always a bad thing. Taking on debt to buy an asset that can grow in value like a house or a business is typically a good bet. However, there’s definitely “bad debt” that you should try to pay off as quickly as possible. If you have non-essential debt in your life from credit cards, or personal loans, etc., you should develop a one to 5 year plan to pay them off. One suggestion that I’ve seen help many people is to actually start with paying off your smallest debt first, then snowball up to paying off your largest debt. That way you can quickly see progress in eliminating even some of your smaller balances. This progress will serve as a motivator to continue the journey to becoming debt free.


Save For Your Big Events

We can’t prepare financially for everything, which is why having emergency savings is so important. However, there are many things that we can plan and save towards, so take a look at your upcoming plans for 2015 (and maybe 2016 and 2017), and think through any life events you have coming up. If you’re thinking about paying for a wedding, having a baby, saving towards college or starting your retirement savings, these are all things you can build into your budget. Once you’ve built up your emergency savings and your debt is under control, you can allocate extra money to some of these important life events.


Spend at least One Hour per Month on Financial Planning

Most of these above mentioned resolutions revolve around utilizing the budget you’ll set up today, but we all know things don’t always go as planned. You might find yourself needing to get your car repaired one month, or you’ll need to put some money towards a birthday gift the next. Rather than getting frustrated and just giving up on your budget all together, instead, plan on spending at least one hour either at the beginning or end of the month looking over your finances to tweak them so that you’ll stay on track, despite surprise expenses.

In research for my recent book, You Can Retire Sooner Than You Think, I learned that the happiest retirees spent at least five hours a year planning their retirement. That means you just need spend at least 25 minutes each month thinking through your retirement plan, your budget, and your overall financial goals. Then you’ll be in great financial shape and set yourself up for a happy retirement!


Budget For Fun

Financial planning and budgeting isn’t about depriving yourself from every joy in the world. So, I like planning for fun. Put it in the budget, and plan for it. That way, when it comes time to spend money on something that you love to do, you won’t feel guilty about it because it’s already in the budget! So, go enjoy a dinner out with your significant other, or catch a concert with some friends.


Bottom Line

The real trick to being successful with New Year’s resolutions is to set attainable goals. The above ideas for financial resolutions should be adapted to fit your situation, and help get you on the right path to financial freedom. Happy New Year!


Read the original article here.


The Cost of Thanksgiving

At a time of year when big turkeys and big-screen TVs come to mind, I’m blown away by the story of two women who have decided to camp outside of Best Buy in California for 22 days leading up to Black Friday. They are determined to be first in line for the TV deal that Best Buy is offering on a first-come-first-serve basis the morning of November 28th. This just might be the most extreme approaches to trying to save money on Black Friday that I have ever heard. What’s worse is that by quickly running the numbers you can see that in those 22 days that the ladies are camping outside the store they’re missing out of 600 working hours. At California’s minimum wage that’s equal to $5,400.

I can’t help wondering when hearing this, if these ladies are planning to have their families come out to the parking lot for Thanksgiving dinner this year, or if they are skipping Thanksgiving altogether for the sake of this “great” deal. These antics seem like something you’d see on TV. Maybe these ladies are angling for their own reality TV show. That’s so passé ever since they took U.S. The Apprentice off the air.

I hope before you pack up your tent to camp outside a store that you think through the numbers to be sure that not only is the deal worth it, but also your time. Our culture has become obsessed with the quickest or easiest perceived way to “save” money, and in doing so, sometimes we cut off our nose to spite our face.

I can’t go through all the finances behind this holiday weekend, but let’s look at some of the general costs most Americans are facing this weekend so you can best figure out how to stretch your Thanksgiving dollar.


Thanksgiving Dinner

Americans are expected to spend over $2 billion on Thanksgiving dinner this year, with the average amount of $54.18 spent per household. This cost of course includes the turkey, which has become the figurehead of this holiday.

Thanksgiving certainly earns its nickname of “Turkey Day.” The US has actually doubled the number of turkeys we purchase for Thanksgiving in the past 30 years. In 2013 we even imported $19 million dollar’s worth of live turkeys primarily from Canada. This year we’re apparently experiencing a shortage of turkeys, but I don’t expect that to pull down the average of three pounds of turkey each American consumes on Thanksgiving.

There are of course additional costs for the classic Thanksgiving sides. If you are still looking for ideas on what to bring to your family gathering this year, check out The New York Times’ list of sides inspired by the different states.  With an average of just of $50, Thanksgiving dinner hopefully doesn’t weigh on your pocket too heavily.


Black Friday

If you are a big fan of the shopping associated with Thanksgiving, there are a few trends to watch. Last year we saw 92 million people actually shop on Black Friday, and spend a total of $57 billion.

Accenture released a study that shows that 66% of Americans are planning to join in the shopping frenzy on Black Friday. That’s actually up 11% from last year.

This research also said that almost half of America is planning to shop on Thanksgiving Day!

They also found that Millennials are more likely to participate and spend more than their older cohorts this year. However, the study also notes that they’re more likely to do so from their laptop or mobile device. You won’t catch them standing in line for days ahead of time.

Of course, technology is playing a huge role in this year’s Thanksgiving weekend shopping extravaganza. While Cyber Monday has been going strong for years now, many of those in the Accenture study said they would be using technology to facilitate either finding good deals, finding where items are in stocks, or for just skipping a physical store all together.

The Uber Economy strikes again!

Here’s another bonus that all of us in Atlanta can take advantage of this week to help save a few dollars. If you’re feeding a small army (or an exceptionally hungry group of people) and are going to spend $1,000 on food anyway, if you shop at Kroger and then fill up your gas tank while you’re at it, you can save up to a full dollar per gallon. (For those who are closer to the average of $50, those Kroger points will still ad up!). With Georgia’s average price per gallon already under $3/gallon, you could end up paying less than $2/gallon. What is this, the 90’s? Nope, just one more way to avoid getting crushed by the cost of Thanksgiving.


Read the original article here


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