Advertising
Advertising

10 Financial Moves You Need To Make This Year

10 Financial Moves You Need To Make This Year

Whatever past mistakes you’ve made, 2014 is the year to change your habits. I’ve noticed I’m an impulse spender who always looks forward to that next big purchase. No matter how much money I make, it never feels like enough, as I’m always filling previous voids. In order to break that habit, I sought the advice of several financial analysts and life coaches. Each helped me identify trends in my personal life that affect my finances. To combat it, we’ve come up with a list of financial moves I need to make this year, and you should too.

Assess Yourself

dollars Lifehack Versability

    Smurfette wept at she stared at the pile of bills she earned at the strip club…

    Advertising

    Take an objective look at your finances. Are you making enough to cover your spending while paying your past financial obligations and preparing for the future? If you’re spending based on future income, there’s an issue. You need to look at the numbers involved in your personal finance at least once a month to ensure you’re staying abreast of your current financial situation.

    T.J. Tillman, a founding partner at Empire Wealth Management says, “My recommendation is to have a hierarchical set of financial priorities and not stray from it.  The order would be (from bottom to top) paying for basic monthly expenses like food, shelter, etc., money set aside for emergency savings, money set aside for retirement, and then discretionary income to save up for major purchases. By following these guidelines, it’s possible to live a life with significantly less stress and still work towards those material things that are nice but not necessary.”

    Pay off Your Credit Cards

    Your highest interest rates are coming from your credit cards–and that’s just the start of where they get bad. Having revolving credit is only good for your credit if you have an abundance of available credit (money you could spend, but haven’t). Even this is only true of true credit cards; pre-paid credit cards don’t even report to your credit agency (you’re paying a fee to use your own money).

    Advertising

    Paying off credit cards is a vital step in treading above financial waters. Pay off cards with the highest interest rates first, and know that if you took out any cash advances, that balance is paid off last (earning the banks the highest interest rate for as long as possible).

    Strengthen Your Reserves

    Every penny you save counts. Stop looking at bonuses as “free money.” In fact, stop looking at any money as free; you have to work for every cent. Stop discrediting the effort you put into your own personal blood, sweat, and tears, and instead start paying the most important bill of your life: your monthly payment to your personal savings account. You want to have at the ability to pay at least 3-6 months worth of bills in case an emergency comes up. You’re never 100% in control of your own income, and even if you were, life happens. Be prepared for an empty tanks with a reserve can just in case.

    Settle Your Debts

    It’s never fun owing anyone; I’ve never heard someone say, “I’m so happy I owe money to (insert anyone’s name).” Settling debts will strengthen your reputation and lift a mental burden from your shoulders. Instead of thinking about who you owe what to, you can concentrate on what’s important in life. “Karma is real, baby,” explains Life Coach Melanie Cobb. “Money can’t flow to you if your incoming channel is clogged with old resentments, guilt, or small stories.” Drop the guilt and clear those burdens off your plate.

    Advertising

    Tired Until You’re Retired

    Unless you’re Benjamin Button, one day you’re going to get old. If you don’t start saving now, you’ll be one of those old people who’s still working. It’s easy to think you’ll never be that way, but it’s as inevitable as death if you don’t do something to prepare now. What if the world ended today? What if aliens invaded and are going to destroy the earth. You’re not on the president’s call list–he doesn’t even know you exist. So what will you do? If you don’t have a plan, you’re not a survivor of the zombie apocalypse; you’re a zombie.

    Habits Are Made to Be Broken

    Bad spending habits are the root of most people’s financial problems. Stores know this, and that’s why there are impulse items strategically placed throughout the store. In fact, nearly everyone is counting on you to spend money, and the only person you can count on to be responsible with your personal finances is yourself. Break free of bad spending habits by practicing discipline and focusing on your financial goals, rather than relieving your temporary cravings. Also a word of advice–eat before you go grocery shopping to keep from overspending.

    Review Your Permanent Record

    You need to check your credit report today; in fact it’s a good idea to check it at least once a month. Remember how you had a permanent record in school? Teachers would always threaten to list misdeeds on your permanent record. You couldn’t see your permanent record then, but you can check your credit report to ensure you truly are responsible for the financial decisions you’re being credited for. Now you know, and knowing is half the battle.

    Advertising

    Be Open About Your Finances

    If you keep your finances a dirty secret, it’ll eventually come out the closet to bite you in the ass. You need to be honest with people–you don’t have to tell them how much money you make or have, but you don’t need to be ashamed to tell people you’re not willing to pay to go out because you’re currently saving. They may ask questions, but you can politely remind them that you’d rather not discuss finances whenever it gets too personal. You don’t need to broadcast your checking account balance; just don’t act like you have ends you don’t.

    Seek Professional Help

    There’s no shame in asking for help. Even Michael Jordan needed coaching. People like T.J. Tillman and Melanie Cobb represent an entire industry dedicated to coaching and motivating people through the tough financial times. It’s not necessary to take on the burden of all your debt and finances yourself. Cash rules everything around me, so it’s a pretty big deal that’s worth spending time discussing with a qualified professional.

    Be Realistic

    We all want to be billionaires and spend money on all the things Bruno Mars sings about, but we’re not all CEOs, so we’re not likely to have that chance. Be honest with yourself; you can lie to everyone else, but always be honest with yourself about where you actually are. You can’t find your destination if you don’t even know where you’re at. Realistically assess your resources and options, and stick to goals you can actually stick to; it may take a little suffering, but, with resourcefulness and perseverance, you can make the right financial moves this year to bring success to any endeavor.

    More by this author

    How to Disappear Completely and Start a New Life 7 Ways To Make Exercise Fun For Everyone How to Live Life to the Fullest Say Goodbye to a Skinny Body: How to Gain Weight Fast 20 Things Life Is Too Short to Worry About (+ How to Ditch These Worries)

    Trending in Money

    1 How to Use Credit Cards While Staying Out of Debt 2 How to Use Debt Snowball to Get out from a Financial Avalanche 3 How Personal Finance Software Helps You Get More Out of Your Money 4 The Best Ways to Save Money Even Impulsive Spenders Can Get Behind 5 How to Answer the Tough Question: What are Your Salary Requirements?

    Read Next

    Advertising
    Advertising
    Advertising

    Last Updated on March 4, 2019

    How to Use Credit Cards While Staying Out of Debt

    How to Use Credit Cards While Staying Out of Debt

    Many people will suggest that the best thing to do with your credit cards during these tough economic times is to cut them up with a pair of scissors. Indeed, if you are already in huge debt, you probably should stop using them and begin a payback strategy immediately. However, if you are not currently in trouble with your credit cards, there are wise ways to use them.

    I happen to really love my credit cards so I will share with you my approach to how I use mine without getting into deep financial trouble.

    Ever since about 1983 when I got my first Visa card, I continue to charge as many of my purchases as possible on credit. Everything from gas, groceries and monthly payments for services like my cable and home security monitoring are charged on credit. Despite my heavy usage, I have maintained the joy of never paying any interest fees at all on any of my credit cards.

    Advertising

    Here are some tips on how best to use your credit cards without falling into the trap of paying those nasty double-digit interest fees.

    Do Not Treat Credit Cards as Your Funding Sources

    Too many people treat their credit cards as funding sources for major purchases. Do not do this if you want to stay out of trouble. I use my credit cards as convenient financial instruments so I do not have to carry around much cash. In fact, I hate carrying cash, especially coins. When you buy things on credit, the purchases are clean and you will not get annoying coins back as change.

    I do not rely on my Visa, MasterCard or American Express to fund any of my purchases, large or small. This brings me to my golden rule when it comes to whether I will pull out any of my credit cards either at a retail or online store.

    Advertising

    I never purchase anything with my credit cards if I do not have the actual cash on hand in my bank account.

    If I really cannot pay for the item or service with cash that I already have at the bank, then I simply will not make the purchase. Remember, my credit cards are not used as funding sources. They are just convenient alternatives to actual cash in my pocket.

    Make Sure to Always Pay Off Balances in Full Each Month

    The next very important part of my overall strategy is to make absolutely sure that I pay the balances in full each and every month no matter how large they are. This should never be a problem if the cash has been budgeted for my purchases and secured in the bank. I have always paid my full balances each month ever since my very first credit card and this is why I never pay interest charges.

    Advertising

    Using Credit Cards with Rewards

    Most of my credit cards are of the “no annual fees” type, including one MasterCard on a separate account I keep at home as a spare in case I lose my wallet or incur any fraudulent charges. However, I do use a main Visa card which does have an annual fee because all purchases on that card reward me with airline frequent flyer points. For me, the annual fee is worth it since I do travel and I get enough points to redeem many free flights.

    You have to decide for yourself if you will charge enough purchases on credit each year without paying interest charges to warrant a credit card that rewards you with airline points (or other rewards). In my case, the answer is “yes” but that might not be the case for you.

    I occasionally use a MasterCard or American Express card on small purchases just to keep those accounts active. Also, I have been to the odd retailer that accepted only a certain type of credit card, so I find that having one from each major company is quite handy. Aside from my main Visa card which earns the airline points, the rest of my cards are of the “no annual fees” variety.

    Advertising

    So this is how I use my credit cards without getting into any financial trouble with them. This strategy is recommended only if you are not in debt, of course. In fact, it is worth keeping in mind once you’re out of debt so that you can keep your credit cards active and treat them responsibly.

    What are your credit card usage strategies? Let me know in the comments — I’d love to hear what methods you use.

    Featured photo credit: Artem Bali via unsplash.com

    Read Next