With holiday festivities ongoing, and calendars serving as a reminder that there are 5 days left until the conclusion of 2018, the pressure to reflect as well as create New Year’s resolution lists intensifies. As such, as individuals mull over the pros and cons of the year, ultimately narrowing their focus on habits that need serious amending, one resolution that remains supreme is improving money management skills. According to a 2018 Fidelity Investments survey, 32% of respondents resolve to improve their finances in 2019. Additionally, 48% resolve to save more, 29% aim to pay down, and ultimately eradicate their debt, and 15% will work to save more. Therefore, with these statistics at one’s disposal, goal-setting should be uncomplicated. However, for many, the thought of brainstorming is exhaustive. Nonetheless, whether you are ready to grab the upcoming year by the fiscal horns or are dreading the confrontation of any and all things money-themed, a common theme should emerge: resolve to build realistic financial strategies.
Generating concrete, realistic financial goals will help to improve financial literacy and will increase accountability in applying theory to practice. Because it is widely known that individuals fall short in upholding their New Year’s resolutions as early as mid-February 80% as noted by a U.S. News and World Report, it is important that goals outlined are not only tangible but accurately reflect you are current financial and personal circumstances. Moreover, because refining one's financial life is a marathon, every goal outlined, and the necessary work put forth to accomplish said goal, should be intentional and patiently executed. If you are unsure where to begin brainstorming, here are a few tips to jumpstart the process: Who? What? Where? When? Why? How? Before working to accomplish your financial goal, you first to identify what your goal is/what your goals are? Moreover, your goals should be specific. Are you seeking to obtain a Master of Arts degree in Graphic Design? Are you looking to save exactly $10,000 in 6 months as a down payment for a used car? Are you looking to purchase a 3-bedroom, 2 bathroom home in New Jersey? Want to pay off the remaining $2,500 balance on your undergraduate Perkins loan? To increase your chances of achieving your goal, specificity is crucial coupled with identifying whether goals will be fulfilled in the short- or long-run. Basic Budgets 101 At the core of any financial plan is a solid budget. No matter where one lies on the income spectrum, knowing how money is dispersed is essential to mastering finances. Thus, a good budget helps track spending and does not leave one feeling as if they are on a financial diet (drastically cutting back on expenses to improve financial health). To start, utilize a method that works best for you, i.e. pen and paper or technology. Next, categorize your monthly expenses for the optimal organization. Then total your monthly income and expenses (both fixed and flexible). Finally, make adjustments. Save Some of That Money, You Better Stop Splurgin’! On November 30, 2018, rapper Meek Mill released his highly-anticipated fourth studio album Championships. With a compilation of 19 tracks, the album has been met with critical acclaim due in part to Meek’s cleverly calling attention to economic and educational advantages plaguing inner cities coupled with a loud cry for long overdue prison reform. Hard hitting and personal, critics and fans alike have marveled over the JAY-Z and Rick Ross collaboration titled What’s Free? while others, me included, were amazed by track number 6 Respect The Game. In the song, Mill reflects on the rules of both the rap and street game he has come to learn and respect, over the years. One rule in particular that enthralled me was "Rule #3: Save you some of that money, you better stop splurgin'!" Given my brand, it is of no surprise that this rule stood out from the fray. Therefore, if you are looking to seriously save, commit to either one, or all, of the following: “no-spend Mondays”, “no-spend weekends”, or “no-spend April”. As such, you are vowing to NOT spend money (cash, credit, or debit) on a select Monday, weekend, or the duration of April. Additionally, you are vowing to eat brown-bagged breakfast and lunch meals, to research free entertainment in your city, and to forgo shopping sprees. To ensure that you will not waver on your commitments, find an "accountability partner" (a friend, family member, or significant other) who will keep you grounded and focused. Your Health Is Your Wealth Often, we do not schedule annual checkups or dental visits until a lingering problem has transformed into a full-fledged crisis. Thus, to save money on already costly medical and dental bills, consistently schedule appointments and follow through with visits. Likewise, because gym memberships can be a hassle, make the city your playground. Whether you reside in the "big city" or the calm of the suburbs, aim to remain healthy by adjusting your workout regimen to align with the terrain. DIY Debt Relief Similar to budgeting, being specific about eliminating your debt is important. As such, instead of resolving to pay off "all" of your debt, choose one area of debt and commence planning. For example, if your goal is to eliminate your $1,500 credit card debt, plan to pay more than the minimum each month. Likewise, courtesy of the ACH (Automated Clearing House) Network, credit card companies will allow you to automate your monthly payments. Improve Your (Financial) Literacy To improve your knowledge of finance and money and banking as a whole, commit to reading a financial book. While finance can be exhaustive and intimidating research financial books that are not only compatible with your level of competency but are best for your unique financial needs.
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