When it comes to reaching your financial goals (like any other goal), it’s all about finding a routine and sticking to it. Make this your year to solidify the habits and tools that’ll help you stay on course.
Together, these tools can help cut expenses, save for the future, and increase your income:
It’s 2018, online and mobile banking are no longer add-ons — they’re the main attraction. Numerous apps (most of them free) are designed to make saving, budgeting, and bill paying intuitive and automatic. If you haven’t already, it’s probably time to get on board.
For most of us it’s easier to make a few good financial decisions up front than to make lots of good financial decisions day in and day out. Humans aren’t typically that disciplined.
Think how easy it is to invent an excuse when choosing whether to put part of your paycheck into savings each month. Sure, there are times you choose to save, but there are probably just as many chances to reduce the amount you’re saving, or put it off entirely. There will always be attractive opportunities to spend rather than save. But automating your savings can set you up for success by closing the door on future decisions to save less and spend more.
With your bank’s online tools, you can enable automatic payments to your savings account, automatic bill pay to your credit card(s) and your service providers (phone, Internet, mortgage, etc.).
And apps go even further. The one of the most popular budgeting app, Mint, can combine your bank accounts, credit cards, and bills in one place, allowing you to track your money in real time, transfer money between accounts, pay bills, and create budgets.
Another app, You Need A Budget (YNAB), is designed to help stop people from living paycheck to paycheck, only allowing them to create budgets with money they actually have. According to Investopedia, “YNAB is so effective the average user pays off $500 in debt in the first month.”
Finally, one of the most important methods of automating your way toward your financial goals is by maximizing your employee benefits. By enrolling in your employer’s 401(k) or other retirement plan, you’re making one financial decision that essentially automates over and over throughout your career, helping you toward your financial goals.
2. Take advantage of credit card rewards
Whether your credit card offers cash back, airline miles, or rewards to your favorite stores, you can make your spending work for you by using your credit card intelligently. Meanwhile, you’ll be establishing a credit history that can help you buy big, important things, like a car or house.
Of course, you have to be careful to spend only what you’ve budgeted and can cover. It helps to think of your credit card in the same way you do your debit card. The dollar amount in your checking account is what you have available to spend, not your credit limit. There are even apps, like Debitize and Debx to help you do this.
Exercise caution. Taking advantage of credit card perks depends on your ability to pay off the balance every month. Unless you have a 0% APR card (and that perk is only available to a cardholder for a limited time), each month you pay interest to the credit card company based on the balance.
If you only pay the minimum but continue using the card, you’re growing the amount you owe in interest. Additionally, paying your balance in full helps keep your credit utilization ratio in check, an important factor for your credit score.
3. Stop paying full price
When trying to reach your financial goals, it’s easier to cut spending by limiting superfluous purchases. It’s a little harder to cut spending on necessities. Luckily, there are apps out there to make sure you’re getting the best deal.
RetailMeNot gives you access to coupons, product deals, storewide sales, discounted gift cards, and digital rebates to over 50,000 stores.
Key Ring is an app that stores your loyalty and membership cards on your phone so you’re never without a discount. It also lets you search for sales and coupons, create shopping lists, and search for deals across local circulars and coupons.
PriceBlink is a browser add-on that combs the web while you’re online shopping and shows you the best available price for any given item.
4. Look for alternatives to buying new
Getting a good price on an item is important. But do you even need to buy it new from the store? There are money-saving alternatives to traditional buying.
Public libraries offer more than books. They provide audio books, movies, and music, a variety of newspapers and magazines, access to the Internet, online language-learning software, online career-training software, and small-business help — all free. The Denver Public Library offers free passes to Colorado’s 42 State Parks, Go-Pro cameras, museum and cultural facility passes, and wireless hotspots. What’s your library offer?
Certain items like specialty tools and appliances you use infrequently can make more sense to rent. There are tool libraries in many communities that provide tool lending and training.
You never know what you’ll find in a good thrift store or on Craigslist. And you can make use of sites such as Freecycle: a non-profit hub that lets members give and get free stuff within their communities.
5. Plan to eat healthy
Perhaps nothing illustrates the synergic connection between your wealth + health better than food.
According to a study in the Journal of the American Medical Association, poor diets (including diets low in vegetables, fruits, nuts and seeds, and high in sodium and processed meats) go hand in hand with deaths from heart disease, stroke, and Type-2 diabetes. Not the life you might have in mind for yourself.
And according to the American Heart Association (AHA), cardiovascular disease (which includes heart attack and stroke) is devastatingly expensive. The AHA calls it America’s costliest disease, more costly than Alzheimer’s, and the price is expected to rise 135% by 2035. No wonder the Academy of Nutrition and Dietetics came out with a statement supporting plant-based diets as a way to help prevent and treat chronic diseases that harm our wealth + health.
A balanced diet can save you money in the short term too. The Harvard School of Public Health extols the nutritional and money-saving virtues of weekly meal prep. And the Mayo Clinic recommends preparing a meatless meal once or twice a week to save money and keep your health in check.
6. Find a financial friend
Trying to reach your financial goals all by yourself can be challenging. Without a trusted person in your corner you might have a hard time sticking to habits or end up being a little too dishonest when reviewing your spending habits.
Working toward financial goals requires discipline and discipline is easier when you have a friend, significant other, parent, or financial professional to hold you accountable. An unbiased second or third party is less likely to be as sympathetic when your financial choices get a little careless. At the very least, having a planning partner increases your level intention, by forcing you to schedule dedicated time to work on your wallet.
7. Budget your fitness routine
Gym memberships can get expensive, averaging $58 per month. But they can be a good investment in your physical and mental health. To keep up with your health goals without throwing a wrench in your financial ones, try getting serious about budgeting your fitness routine.
Here are a few ideas to help you burn calories without burning into your savings:
- Use Meetup.com to find free workout groups or to play drop-in sports.
- Buy used exercise equipment and old workout DVDs or tapes.
- Only purchase gym memberships during mid-year or year-end sales. You can also keep an eye out for end-of-the-month offers.
- Take advantage of free trial periods at gyms and studios.
8. Create your financial Zen garden
Debts and expenses aren’t the only thing that can disrupt financial goals. Sometimes there’s just too much information. New technologies may have made it easier to track finances, but anyone is still capable of misusing all those apps and products until they’re lost in a sea of pixels and forgotten passwords.
Making good financial decisions depends on having a clear picture of your situation and not getting lost in the shuffle. If you’ve got a phone loaded with apps, a hundred financial profiles half-created, or a file cabinet stuffed with paystubs and receipts, finding an organization method you feel comfortable with might help clarify where you’re heading.
Transamerica doesn’t endorse services or tools listed above.
Things to Consider:
- Financial tools are most effective when they become lifelong habits.
- Start small with one or two things you know you can accomplish during a lunch break or before bed. You can always build from there.
- Share these tools with friends and see what else you can learn from others on the path to financial wellness.