Happy New Year!

Let’s hope it’s a good one, especially with our finances.

New year is always a good time for resolutions, for changes…to start anew. I want to share with you some tips on how to better your finances in 2018. These tips have worked for me. In fact, because they are so helpful, I’ve adopted them as habits year after year.

1.) Track Your Spending- Back in the day, I would just spend, spend, and spend thoughtlessly. I work and make money, but l didn’t have anything left when I got my paychecks. Then, I started to log my spending. That’s when everything changed. That’s when I found out that there are spending that I could actually cut. I found where the money leaks were. You can do it daily, weekly, or monthly. Log your spending on a good old fashioned notebook or an Excel spreadsheet like me. This way, you know where your money is going. After all, it is yours.

2.) Make a Monthly Budget Again, get that notebook or that Excel spreadsheet. Log your income and your fixed and variable expenses for each month, and draft a budget. A lot of us forget about the bills that are due and coming. By having a draft, by listing everything, you know what’s coming every month. You know what to expect and you know what bills need to be paid. You can plan ahead on how to pay for these things.

3.) Emergency Fund – This is one of the most basic foundations of any good personal finance. Emergency fund is the money that you save and allocate only for emergency purposes. A lot of things happen in life – health problems, car problems, other unexpected expenses – you name it. That’s just life. When these things happen, you have the emergency fund to use, and not tap into your savings, or worse, go into debt, which brings us to number 4.

4.) Avoid Consumer Debt Like a Plague – Debt is a prison. When you have debt, you have to pay for it. In 2018, make it a goal to pay off that debt, or not go into anymore debt. Stop using credit cards IF you cannot pay them in full every month.  Not having debt allows you to do more with your money since it’s not tied to any loan.

5.) Save / Invest – These two words are golden in the finance world. If you can incorporate these two in your finances, you are in the right track. It doesn’t have to be big. Save and invest at your own pace. Do what is comfortable for you. Little savings here and little investments there will eventually accumulate.

6.) Go On Vacation (that you can afford)- This might be counter-intuitive, but go on a vacation. It is good for your health. It is good for your overall well-being. Your body needs to recoup from everyday stresses. Treat yourself once in a while. Vacation doesn’t have to be grand. Go somewhere new. Break the monotony. It gives you something to look forward to.

I hope these tips will help you and make your personal finance in 2018 more vibrant. Let’s welcome the new year with a smile, with hope, and with a positive spirit. (Photo credit: entecity.com)