January is famous for its resolutions, many of which often revolve around creating a better financial picture for ourselves. Often the top financial resolutions are “save more, spend less” and “pay off debt”. These are important goals considering the burden of debt, such as the $1.3 trillion student loan debt (source: StudentLoanHero.com) and the $747 billion consumer credit card debt (NerdWallet).
So, how can you finally save more, spend less, pay off debt and get wealthy? Here are some suggestions:
- Start by creating a zero-based budget. Account for every dollar in your monthly budget to the last penny.
- Look for savings on the necessities: bundle your car, home and life insurance. Many companies offer steep discounts for package deals.
- Evaluate your wants: cut the cable and internet. Do you really need 500 channels and the highest speed internet? Perhaps not.
- Minimize: clean up your closet, bookshelves and storage by selling or donating items.
- Shop smart: consider refurbished electronics, which work just as well as brand-new models and are generally offered at a reduced price. Look for coupons on everyday items, like groceries and household good.
- Don’t forget to negotiate. Don’t assume the sticker price is set in stone, especially when it comes to large furniture or electronic purchases, so try bargaining before buying.
- Throw all extra cash in your monthly budget on your debt. Get rid of those pesky car loans, student loans and credit cards once and for all.
- After paying off your debt, build an emergency fund equal to 3-6 months of living expenses.
- Start investing for your retirement and let that compound interest work for you!