Every new year, we set up big audacious goals that we want to accomplish in the new year. Some how, we are magically more likely to succeed because a digit changed on the calendar. Personally, I subscribe to another theory: achieving financial success is making the commitment to take a series of small steps in the right direction.
How to do this? I have assembled a list of small achievable tasks that you can do to move you in the right direction. Note that not all of these tasks are applicable to everyone, but you should be able to pick out enough things to keep you busy for the rest of the year. My recommendation is to pick 2-3 tasks to do, as you complete each task, replace them with another task. For a task that involves an amount, e.g., “save $50 a month” and “pack lunch to work once a week”, you can also try stepping it up, e.g., save $100 a month and pack lunch to work twice a week, etc.
Photo by Alan Cleaver via Flickr
I try to order the list in a way I imagine most people would tackle the list; however, don’t feel obligated to do it in order. In fact, the best way to do it is to pick out what you feel is easiest to do and do a few of them.
- Check your credit score.
- Check your credit reports and fix any problem you discovered.
- Make a list of all of your accounts (e.g., bank, investments, mortgages, credit cards, etc.)
- Track your income, expenses, debt and investments with Personal Capital.
- Start a budget.
- Cut recurring expenses (anything that you get billed monthly); especially, subscription services like cable TV, telephone, gym membership, associations, etc. Saving on recurring expenses mean that you will enjoy the savings every month going forward.
- Trim features off packages, e.g., cell phone, cable TV, etc.
- Be an opportunistic shopper by taking advantage of discounts and coupons.
- Organize your debt repayment.
- Transfer your debt to a lower interest account.
- Borrow money to pay off higher interest debt. There are a lot of people on Lending Club and Prosper doing this, e.g., borrow an installment loan to pay off credit cards.
- Freeze your credit cards, if you have a habit of getting into credit card debt.
- Or charge everything to your credit cards to maximize rewards.
- Eat out less once a week.
- Pack lunch to work once a week.
- Use up your pantry.
- Shop for lower premium car insurance and home insurance.
- Increase your insurance deductibles, but make sure you can afford the deductible if something does happen.
- Start going to gym at least twice a week or cut the membership
- Start a side hustle. Here are another 40+ income ideas to get your creative juice flowing.
- Refinance your home. Interest rate is so low right now that it’s worth making the move. You are likely to improve your cash flow and save money in the long run.
- Cut land line. If everyone has a cellphone, having a “home” phone may not be worth the extra expense.
- Save $50 a month. You can look at your budget or Personal Capital to see your biggest expenses and where you can shave off some expenses.
- Start an emergency fund.
- Start investing.
- Start real estate investing, the easiest way is with a REIT.
- Start investing in commodities.
- Start investing in inflation protected investments.
- Start dividend investing.
- Switch to lower cost investments. (Personal Capital will let you easily track investment expenses and you can research lower cost alternatives.)
- Reassess your asset allocation and rebalance your portfolio. (Personal Capital will provide you with a recommendation.)
- Increase your 401k contributions.
- Start an IRA.
- Start a 529, if you have a child or if you are planning to go back to college.
- Ask for a pay raise.
- Volunteer for overtime.
- Get a part time job.
- Declutter your home, one room at a time.
- Sell your unwanted stuff
- Get a life insurance.
- Get an umbrella insurance, if you have higher than normal risk profile, e.g., you’re a landlord, or people work in your home.
- Increase your thermostat by 1 degree in the summer, and lower it by 1 degree in the winter.
- Insulate leaky windows.
- Transform your home to use less energy — there are 75 ideas here, do the ones that make sense to you.
- Save money with cars — there are 34 ideas here, do the ones that make sense to you.
- Stop watching prime time news. 99% of it are bad news, so why watch it. Just read about what matters to you on the web.
- Adjust your tax withholding.
- Shop at Costco, or other warehouse clubs. If you have a big household, this is a good way to save money.
- Switch to a better bank (or a credit union).
- Save money on health care.
- Create a will.
- Start living a minimalist lifestyle.
Hopefully, this will get you moving in the right direction, and inspire you to make the list your own by adding more tasks to the list. Instead of making big audacious goals that will fail, why not print out this list and knock out a few things each week?
Pinyo is the owner of Moolanomy Personal Finance and a Realtor® licensed in Virginia and Maryland. Over the past 20 years, Pinyo has enjoyed a diverse career as an investor, entrepreneur, business executive, educator, financial literacy author, and Realtor®.