The new year allows us to re-evaluate our lives and commit to making changes in order to positively impact our future. Exercising more and eating better are great goals to physically impact your life in a positive way. Understanding where your money ends up each month and having a consistent budget are also key to a healthy and happy 2025.
Here are 5 easy steps you can take to positively impact your finances in the new year:
Live on Cash Alone
Access to credit has never been easier. Using your phone, you can download an app and apply for a $500 loan within minutes. The short term impact is great. The long term impact, well, not so much. Avoiding high interest rates from short term loans or credit cards by using cash to buy everyday items is paramount to financial success. Sacrificing on the things you want now in order to obtain financial freedom later is more than worth it.
Be Frugal, not Cheap
Buying anything for less than you thought you’d have to spend always feels good. There’s a euphoric feeling knowing you got a great deal. That euphoria quickly wears off the first time that pair of shoes you paid $30 for gives you a blister or a cheap sweatshirt, and a pair of shorts or pants shrinks after their first wash. You either never wear these items again or they gather dust in your closet. You want to justify the deal by hanging on to something you’ll never wear again. In the end, you would’ve been better off paying full price for something you’ll actually wear or use.
Evaluate, Evaluate Again
Life is expensive. Car loans, mortgage payments, child expenses and grocery shopping takes up much of the cash we have on hand. Add in a little fun and you may be wondering where it all goes each month. Evaluating the bills you’re paying on a monthly basis is a great way to identify opportunities to save. Insurance, TV, internet, credit cards, car loans. Each one of these can be consistently reviewed to identify ways to save. Cutting $25-50 off one or two bills can make the difference between a nice dinner out of the house or another meatloaf out of the oven.
Stop Ignoring Bad Financial Habits
Ignoring lingering debt or overspending on wants vs. needs won’t make the problem go away. In the end, there’s a price to be paid in the form of evictions, bankruptcy or marital strife. Even if you won the lottery and all your debts were magically paid, the lingering issue of bad spending habits would still exist. Another lottery ticket would be needed to pay off the future financial mistakes you didn’t address the first time around. Since this is not likely to happen, admitting there’s an issue and working toward fixing it is the only realistic way to have success with money in the future.
Have a Plan, Then Execute
Entering each month of the year with a plan is crucial to financial success. Mortgage rate hikes, HOA dues, spring break trips and summer vacations. All of these happen throughout the year and all of them have an impact on your budget. Planning for them and understanding how and when these items will be paid for will help alleviate the financial burden you feel each time they come around.
Now that we have a financial plan in place, it’s time to focus on the exercise and healthy eating portion of our goals.
Wait a minute. Is that pecan pie I see in the back of the fridge?
