5 Ways to Get Your Finances in Shape Before the Year Ends

Everyone has those New Year’s resolutions that, even with the best intentions, seem to fall by the wayside. While it might be too late for some, there’s still plenty of time left in 2017 to fulfill your financial goals.

Courtney Lindwall, 24, an editor in New York City, says she set out at the beginning of this year to spend less money eating out. While she’s been better lately, she says she didn’t start working toward the goal right away.

“Around March, I was finally like, ‘Enough,’ and have been a little stricter about it,” she says.

In fact, mid-year is the perfect time to re-evaluate your financial situation and find new motivation for saving, says Catalina Franco-Cicero, director of financial wellness and a financial coach at Fiscal Fitness Clubs of America.

“We could all say that we get really excited at the beginning of the year,” Franco-Cicero says. “Then come summertime, we think, ‘Holy cow, I didn’t do anything. I really want to get remotivated.’”

Bruce McClary, vice president of communications for the National Foundation for Credit Counseling, says he also recommends reassessing financial goals mid-year. Making financial resolutions at the new year almost seems to “curse” them, he says, and there are many events to plan for financially in the second half of the year, such as back-to-school season and the holidays.

Here are five areas to evaluate to help you become more fiscally fit in the last half of 2017.

1. Put together a status report

You need to understand your financial situation in order to set goals for improving it. Finding the money to save or pay off debt can seem doubly daunting if you don’t know how you’re spending your money each day.

Evaluate the last six months’ worth of your expenses and income so you can plan for the rest of the year. McClary suggests reviewing the following things:

  • Your budget: Determine how much you’re spending each month on your home, car, food, and other living expenses.
  • Your debts: Make a list of all your debts, how much you owe on each one, the interest rates, and any pay schedules.
  • Your savings: Take stock of your savings accounts, including retirement accounts and emergency fund. Also think of things you would like to save for.
  • Your credit score. (If you’re not sure how, you can check out our guide to getting your free credit score.)

“Really give yourself a full picture of your financial situation so you can then go in and identify your best ways to save,” McClary says.

2. Dig into your spending habits

Once you have a high-level view of your finances, take a closer look at how you’re spending your money.

Franco-Cicero says she uses Mint, a money management tool, with her clients to help them categorize their transactions — a process people can easily turn into a habit.

Then, evaluate your discretionary spending to see what’s not necessary or where you can cut back. For example, consider reducing the amount you spend on subscription services or dining out and use the savings to pay off debt or to boost a savings account.

One thing to remember is seasonal expenses, like heating and cooling, McClary says.

“You want to make sure you’re making adjustments to your budget, while at the same time, being mindful of the expense categories that can change on a seasonal basis,” he says.

3. Reassess your credit card situation

A key step in reassessing your debt is taking a look at how much of a balance you carry on credit cards each month, how much you’re paying off each month, and how long it will take you to become debt free at that rate. You can figure this out with a credit card payoff calculator.

“Say [to yourself], ‘Hey, if I continue at the rate that I am going, will I ever be debt free?’” Franco-Cicero says.

Then create a plan to pay off your debt. McClary says the most important thing is to craft it around what motivates you the most. For example, if paying off the credit card with the highest interest rate motivates you, focus on that. If paying off the card with the lowest balance motivates you more, check that off first.

And even if it seems impossible to pay it off, he says there are benefits to chipping away at your credit card balance: Your minimum payments could go down, and using less of your credit line can help your credit score.

4. Start saving for something

We all know that we should be saving, whether it is for an emergency, retirement, or vacation. However, 23% of Americans don’t save any of their income, and only 38% report making good progress toward their savings needs, according to a 2017 survey from the Consumer Federation of America.

One of the best ways to become fiscally fit is to start saving for something that motivates you. You’re more likely to stick with saving toward a goal that you set for yourself, Franco-Cicero says.

If you don’t know where to start, she recommends a so-called “curveball” account.

“Curveball” accounts are similar to emergency funds in that they can help you cover unexpected expenses. The difference is that your “curveball” account would be used for things like replacing the worn-out tires on your car versus using your emergency fund to repair a blown transmission.

Now is also a good time to focus on saving for a house, McClary says, because you’ll have six to eight months to save before the next home-buying season. You can plan how much you need to save by looking at your existing savings, the cost of buying in your desired neighborhood, your debt-to-income ratio, and your credit standing.

No matter what you’re saving toward, McClary says an ambitious goal would be to save 20% of your monthly income between now and December.

If you make $2,000 a month after taxes, that means you would put about $400 toward savings each month. If you start in August, you could save $2,000 toward your goal by the end of the year.

5. Stick to your plan

Establishing where you are and where you want to be is only half of the battle when it comes to being fiscally fit by the end of 2017. Sticking with your action plan, as with all resolutions, can be the toughest part.

To be successful, Franco-Cicero suggests automating everything you can, from paying your bills each month to putting money into your savings account. This way, you don’t have to think about making sure a portion of your paycheck goes toward savings — your bank account will do it for you.

Franco-Cicero also says you should find a “money buddy” who knows your goals and can help you stay on track. Be sure to find someone who also has a financial goal and who will stick to a schedule so you can check in with each other. It’s a good idea to pick someone with whom you feel comfortable talking about money, not someone who you feel passes judgment on your purchases.

“We can be very lenient with ourselves, so you’ve got to find somebody who will hold you accountable,” she says.

Lindwall has had success following a similar approach. She says cooking more at home with her boyfriend has helped her stay on track toward her goal of eating out less.

“The biggest thing is getting someone else on board to do less expensive things with you,” she says.

The post 5 Ways to Get Your Finances in Shape Before the Year Ends appeared first on MagnifyMoney.

5 Financial New Year Resolutions You Might Want to Try

Here are five financial new year's resolutions to put on your to-do list.

Every new year comes with more New Year’s resolutions. Here are five you might want to put on your list.

1. Have a Plan

Set aside some time in 2017 to go over your finances and see how you’ve been doing. Are you following a budget? Do you need to? There might be some lifestyle changes you need to make to stay on top of your bills. You might have to put together a budget for an upcoming event or start saving for your children’s education. Set aside time to figure out where you stand and how you plan to afford your expenses for the year. Consider reevaluating that plan every three months to make sure you are on the same page or make any adjustments.

2. Set Up an Emergency Fund

If you don’t have an emergency fund already, now is the time to create one. Make 2017 the year you are always prepared, even for unexpected expenses. You never know when your heat will break or you need a car repair. An emergency fund can be an easy fix for an unexpected expense and keep you out of debt at the same time. (Not sure where your finances stand? You can view two of your credit scores, updated every 14 days, for free on Credit.com.)

3. Pay Off Your Credit Card

If your credit card has a balance, now is the time to pay it off. The new year is a fresh start to your life, so why not make it a fresh start for your credit card as well? If you have multiple credit cards with a balance, then you might want to focus on paying one balance down at a time. Continue to make the monthly payments on all cards, although you might want to make biweekly payments to the credit card with the highest interest to see a decrease in your overall balance.

If you have a large amount of credit card debt and aren’t sure how to repay it, you might want to consult with a debt attorney or bankruptcy attorney to weigh your options. It can’t hurt to ask. Consider making a list of your questions before seeking help.

4. Check Your Statements Regularly

Do you check your statements every month? Are you aware of how much money is in your bank account at all times? Make it a New Year’s resolution to always check your finances. You might want to consider signing up for online banking or downloading your bank’s app to help you stay organized. If you are always in the know, then you will always have an idea of how much debt you have, how much you can spend and if there have been any irregularities in your account.

5. Save for an Event

Have anything big planned for 2017? You might want to make a list of financial goals and pick one to start with. Maybe you and your partner have always wanted to go on a tropical vacation together but never had the money. Now is the time. Put a little money aside each month and give yourself an end date. You might want to give yourself a year to save, depending on how much you’ll need. Be sure to check your budget before you save for your goal. You don’t want to fall into debt because you were putting too much money into your savings and didn’t leave enough over to live on.

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The Science Behind Keeping Your New Year’s Resolutions


January 1 brings a lot of sobering realities. Most of us will wake up with a literal or metaphorical headache. We’ll likely be heavier, facing bigger credit card bills, and headed away from our families and back to the grind. We’ll probably be facing the worst weather of the year and the darkest days, too. Not a great time to make a major life change.

But about half of us will resolve to do so anyway. And, according to a lot of anecdotal research, half of those folks will have given up on their resolutions by Martin Luther King, Jr. Day, and a majority will abandon ship by Valentine’s Day.

This year, be the exception rather than the rule. There are some simple steps you can take to really increase your chances for success. (Simple, the word is so important, it bears repeating.) Here’s some research about why resolutions fail so often, and what simple changes you can make to make your promises stick instead.

1. Vague vs. Specific

These lessons apply to losing weight or saving money, but they can really apply to any life habit you want to change in 2016. In fact, I hope none of you resolve to lose weight or save money, because those are vague, grandiose goals and you will almost certainly fail. Instead, you should pick small, specific goals and stick to them. As professional athletes often say, take care of the little things and the results will take care of themselves.

Vow to generally spend less this year and you’ll likely fail (I promise). Vow to bring a lunch two days each week and save money on your food bill, and you’ll have a fighting chance. Vow to eat a piece of fruit instead of a bagel for breakfast every other day, and you’ll really be getting somewhere.

2. Big vs. Small

Sure, it’s great to decide you’ll run a marathon, and for some people that works. TV shows are made about those people. Normal humans have to start with something much more modest, like walking around the block after work three times per week. But there’s great news on this front. Much of the health benefits from exercise occur within the first few minutes. Simply getting started is where it’s at.

New York Times writer Gretchen Reynolds published a book in 2012 called The First 20 Minutes explaining the science behind this phenomenon, but here’s what you need to know: Put your sneakers by the door and make sure you walk or run around the block every day. Buy some really warm yoga pants if that helps. And forget about the marathon, just make it to Valentine’s Day. A cascade of good things will happen to your body. Ariane de Bonvoisin writes in her book The First 30 Days that it takes 30 days to replace a bad habit with a good one (but many people fail at around two weeks). That’s why it’s so important to make it to mid-February.

3. Perfect vs. Sympathetic

A day will come when you choose happy hour over running. Or you don’t pack your lunch. Or you eat pizza. Don’t despair! Just put your sneakers on tomorrow. The real reason most resolutions fail is because people quit when they stumble. They say “the heck with it,” technically, releasing the goal. You won’t be perfect. Plan for that. And just plan for the day after your failure to pick right back up where you left off.

In our book The Plateau Effect, Hugh Thompson and I wrote a lot about the creeping disease of perfectionism hitting the Western World. Perfectionism is the enemy of change, and you should see it as that. Gretchen Rubin, author of Better than Before and The Happiness Project, makes the point that people who treat themselves (and others) with sympathy have an easier time picking themselves up after a fall. People who beat themselves up lose energy and give up more often. Be nice.

4. Failure vs. Plateau

Speaking of The Plateau Effect, there’s a biological reason many diets fail around the two-week mark — because that’s when diets seem to stop working. In the book, we analyzed weight loss of participants in a TV show and found average weight loss always plummets during week two. That’s natural, success followed by stuck. It happens in every life adventure, be it starting a business, saving money, learning to play piano, exercising or studying a new language. Beginner’s luck followed by sophomore slump. Plateaus often make people despair (“why skip dessert when I’m not losing weight anyway?”) because they are misunderstood. Prepare for plateaus, and you’ll be able to keep going when it seems like you aren’t going anywhere.

5. Bias vs. Reality

University of Colorado researcher Margaret Campbell described an important phenomenon in a paper published this year in the Journal of Consumer Research called “When One Step Forward Seems Larger Than One Step Back.” She called it “progress bias.” Basically, people trying to save money or lose weight give themselves too much credit when they do the right thing and not enough “demerits” when they slip up. For example, Campbell and fellow author Caleb Warren of Texas A&M measured people’s reactions to either spending or saving money. Turns out, they tended to overestimate how much they saved and underestimate how much they spent (which is why that January credit card bill is nearly always such a surprise).

But, good news: All sorts of new technologies make measuring progress easier. Fitness apps let you log in your eating habits; budgeting apps follow day-to-day spending. Tools, like Credit.com’s free credit report summary, let you track your credit score each month. Rubin calls this the “Strategy of Monitoring.” Reality can sometimes be harsh, but it will keep you on track.

6. Alone vs. Together

Everyone knows it’s easier to stick with exercise when you have a workout buddy. Peer pressure really does work. It’s much easier to wake up in the morning when hitting the snooze button will let down a friend. But if you don’t have a workout buddy, you can replicate some of that positive peer pressure in lots of ways. Tell friends your goals (“If I don’t bring my lunch on Monday, yell at me!”) Make promises (small ones) on social media. Sign up for an online class or program designed to coach you through change. (Gretchen Rubin offers 21 days of 21 tips to change a life habit; I have a 30-day Getting Unstuck Challenge; you can find plenty of other similar programs online.)

7. Denial vs. Reward

Both these things are important as you try to make a life change. Positive reinforcement is lovely, but in reality, there will come a day when you will have to say no to the new TV you don’t really need or the cupcake you definitely don’t need. However, plenty of research suggests that the carrot is more important than the stick when sticking to a goal. My favorite involves Joe Kable’s brain studies at the University of Pennsylvania. He finds that people who are good at imagining positive future outcomes – say, they can imagine that new car smell in the future when deciding to save money today, or they can imagine how great it will feel to look good in that bathing suit – make better choices about food, money, drugs, even relationships.

So practice imagining. It’s cold. It’s dark. It’s dreary. Go easy on yourself. Think about spring. Give yourself cheat days. Buy yourself new workout gear or running shoes. Do whatever it takes to get you walking around the block or saving a few dollars every day. Valentine’s will be here before you know it. If your body and your bank account are a just little healthier by then, you’ll be doing great. And way ahead of the pack.

More Money-Saving Reads:

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5 New Year’s Resolutions You Wish You’d Made 10 Years Ago


The new year brings reflection and reassessment and, although a big list of New Year’s resolutions can be difficult to keep, it is worthwhile making and keeping just one solid change each year.

Here are five changes that will move you toward a better future. Think where you would be now if you had acted on even one of these resolutions 10 years ago. Make one or all of these moves now, and thank yourself heartily in a few years!

1. Boost Your Retirement Savings 1% a Year

Can you picture yourself saving 20 or 30% of your salary toward retirement? I know, right? It sounds radical.

Yet, when you consider the losses you could suffer from a volatile stock market, our growing lifespans and the potential shrinkage (or even loss) of Social Security in years to come, the only guarantee against old-age poverty is to save about 30% of your earnings and invest it conservatively, some retirement experts are saying.

Ten years ago, if you’d started adding a measly 1% a year to your retirement savings, just $25 more out of each $2,500 paycheck, today your contribution would be 10% higher. If you were saving 10% in 2006, you’d be at 20%. If you were deducting 15% toward retirement, you’d be saving 25% by now, solidifying a safe future in retirement or maybe even a chance at early retirement.

Here’s how to get started:

  • Divert money before you see it: Sign up for automatic payroll deductions so the money never reaches your checking account, derailing any temptation to spend it. If your employer doesn’t offer automatic deductions, your bank will let you automatically divert a set amount into savings monthly. (If not, find a new bank).
  • Automate your increases: Some workplace retirement plans let you choose to automatically bump up your savings each year, which makes the dent in your paycheck scarcely noticeable. If you don’t have this feature at work, muster your resolve and do it yourself, raising your retirement contribution by 1% each January.
  • Run the numbers: Say you earn $80,000 a year. At a 10 percent annual savings rate, you put $8,000 before taxes into a 401(k) each year. If you’d bumped your savings rate by a half percent a year for a decade, to 15%, you’d be putting away $12,000 a year today. If you’d pushed your rate up by 1%, you’d be saving $16,000 a year now, doubling your contribution in 10 years. Experiment with your own numbers using several online retirement calculators. These are not precision instruments, so try several to get a rough idea.

2. Drop Your Defenses

Maybe you needed your weapons when you were younger. Life is rough, after all, and many kids get kicked around in families and by peers while they’re too young to escape. So, we’ll give you that.

But defensiveness – the impulse to meet every challenge with an attack – robs us of the chance to hear information we need. It cheats us of the chance to hear what friends, colleagues and loved ones want from us. That, in turn, robs us of chances to grow, to succeed and to make more and deeper connections. In other words, defenses protect us from life. If you’d been listening 10 years ago who knows how much richer your life would be today.

Here’s how to do it:

When someone asks you to listen, just do it. No arguing (nope, not even in your head). No counter-attacking. You don’t have to agree. Or respond. Just say you’ll think it over. You’ve got your own grievances, no doubt. Save them for later, for when it’s your turn to be heard.

3. Quit Smoking

It’s not easy to be a smoker today. Scorned and despised, smokers are stuck puffing away in backyards and alleys, in rain and snow, because no one else wants their second-hand smoke. Daily smokers dropped from 16.9 to 13.7 percent of the U.S. population between 2005 and 2013.

Probably you’ve tried to quit. It’s likely you’re wrestling with a serious addiction. We get it. If quitting was easy and you wanted to stop, you’d have done it by now.

But don’t give up trying. Even the most-committed addicts can and do drop cigarettes for good. Often it takes many attempts and many failures to succeed at quitting for good.

Smoking harms nearly every organ in your body. It contributes to a fat catalog of diseases, from atherosclerosis (hardening of the arteries) and blindness to chronic obstructive pulmonary disease and diabetes, to a dozen kinds of cancer. Quitting is the kindest possible thing you can do for yourself.

If you’d quit smoking in January 2006 and stuck with it, you’d have a smoke-free decade by now, adding years to your life. Your risk of a stroke would be nearly the same as a nonsmoker’s. Your chance of getting lung cancer would be nearly half that of a smoker’s. (Here are the health benefits of quitting.)

Here’s a starting point:

Tobacco-free.org has the tools and help.

You can do it alone, but the long-term success rate grows when you combine counseling, medications and other tools. Says the American Cancer Society:

  • Just 4 to 7% of quitters succeed even short-term without medicines or other help.
  • A quarter of quitters who use medicines are able to stay off tobacco for at least six months.
  • Some combinations of medicines work better than one drug alone.
  • Counseling, emotional support and behavioral therapy boost the success rate of medicines and help quitters stay smoke-free.

4. Ask Regularly for Raises

If you aren’t getting regular raises, you should be. Don’t wait for review time. Raises are critical for your ability to keep pace in your field and progress financially. Even small increases are better than none as they add up over time and build a larger base from which to negotiate next time.

Consider your request from your manager’s point of view; prepare to demonstrate your value to the company, citing numbers and anecdotes. This may require you to put on the steam at work and keep careful track of your results so you’re armed with data. The Harvard Business Review has dos and don’ts, including how to gather evidence to support your case, choose the right moment to ask, make the pitch confidently and negotiate.

If your company simply won’t part with the money, it may be time to look for a better job which, fortunately, is doable in the improved economy.

5. Decide Whether to Change Careers

If you’ve spent years wondering whether to leave your career or double down and improve it, make a decision. Decisions that drag on and on sap your energy and make it difficult to commit enthusiastically.

If you’d chosen your course in 2006, you’d be established in a new career by now, with training and job hunting behind you.

Here’s how to proceed:

Don’t just go back to school without researching and shaping a detailed plan. School is expensive and taking on student debt is risky. A certification program or vocational training may pay off better in the long run.

Learn all you can about the field you like, interviewing and job-shadowing people who do the work you want. Here’s help with the decision, including learning about employment and earnings after graduation:

  • The Bureau of Labor Statistics’ earnings report gives employment projections and wage data by industry. This tells you if the field you want to enter is in demand and what you’re likely to earn.
  • The BLS’ Occupational Outlook Handbook delves even deeper into the likely growth rate of jobs, the number of expected new jobs in a field, the pay and education and training required
  • Consider using a career coach. The Wall Street Journal tells how to shop for one. Fees run between $50 and $300 an hour, The Journal says, so do your research before hiring.
  • Forbes’ careers writer Kathy Caprino lists 5 ways to tell whether to switch careers.

More From Money Talks News:

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5 Things to Do on New Year’s Day to Start Your Financial Year Right


For many, New Year’s Day is time to take stock in the year that was and focus on how to make the coming 12 months even better. One way to do that is take a few minutes from the day and examine your finances. Here are five tips that can help you do the most to ensure a happier financial new year.

1. Make a Plan Pay Down Debt

If you’re among those carrying a balance on your credit cards, you may want to increase the amount you pay each month — especially if you’re only paying the minimum amount due. Credit card interest can add up quickly.For example, if you’re carrying a $5,000 balance on a credit card with a 16% annual rate and make only the minimum payment required to get out of debt eventually ($117 in this case), you will be debt-free in April 2021, paying $7,541 over the life of the debt. But by kicking in an additional $25 a month to that payment, you can be debt-free 1 year and 4 months earlier and pay roughly $750 less in interest (a total of $6,802 vs. the aforementioned $7,541). You can see how your current credit balances are affecting your credit scores by viewing your free credit report summary updated each month on Credit.com.

2. Review Your Retirement Savings Plan

If you have a 401(k) plan through your employer, consider increasing the percentage of your income you’re setting aside each pay period — especially if you recently received a raise. A 1% increase could help speed you toward your savings goal, and you won’t likely miss the funds. Also, take a look at how your funds are invested. If they’re in mutual funds with a high expense ratio, consider a lower cost option, such as an index fund or target date fund. If your employer doesn’t sponsor a 401(k) plan, consider opening a traditional or Roth IRA through a low cost provider. If you contribute to a traditional IRA before April 15, you may be able to deduct the amount of the contribution from your 2015 taxes.

3. Boost Your Emergency Savings

Scrambling to find cash when your car breaks down or the roof springs a leak is no one’s idea of fun. One way to alleviate the stress is to automate your savings. Ideally, you should have about six months’ worth of household expenses set aside, but, at first, you can start with a less lofty goal, say, $1,000. Then, set up an automatic transfer from the account where your paycheck is deposited into a savings account specially designated for emergencies. Alternatively, many employers allow you to deposit your pay into different accounts on payday, eliminating the need to set up a transfer. However you do it, you can start small and then increase the amount incrementally as you’re able.

4. Assess Your Regrets

Have a few? While it doesn’t pay to dwell in the past, taking few minutes to see how you could’ve better managed your money in the past year can help you think about better ways to manage your money in 2016. Changes could be something as simple as being better organized when you go grocery shopping. Compiling a list and searching for coupons, for instance, could help eliminate needless trips that waste both time and money.

5. Plan, Plan, Plan

We all have projects we’d like to complete in the new year, and now’s the time to think about which ones to get done. The beginning of the year can be a good time to find deals on any Do-It-Yourself supplies you may need for spring or summer projects. And it’s also a great time to reach out to home-improvement contractors for those plans that are beyond your skills — in a few months, they may be too busy to return your calls.

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