By David Katz
As everyone knows, it’s a lot easier to make New Year’s resolutions than to stick with them. So, if you want to improve your current financial situation, you should try to develop some new saving and spending habits. That’s really the secret to taking control of your financial life.
Whether you’re a professional making $250,000 a year or just scraping by on a minimum-wage job, there are important steps you can take in 2014 to improve your income, pay your debts, reduce your spending and save for the future.
Here are ten suggestions for building habits that will turn your New Year’s resolutions into lasting financial achievements.
1. Start a monthly household budget to track your income, spending and savings. Gather your pay stubs and write down all the bills you pay each month. It’s almost impossible to make a change for the better without knowing your starting point.
2. Dedicate one hour a month to reviewing your budget and other personal financial accounts. It’s well worth a small investment of your time to see how your actual income and spending compares with your budget estimates.
3. Track your wages, salary and any other income. That should be the “ceiling” for your monthly spending.
4. Look for opportunities to increase your monthly income. Can you bring in more money by working overtime, taking on additional jobs or growing your professional practice?
5. Find one or two things you can do each month to reduce your spending. Even small steps can make a difference in your monthly budget.
6. Before you spend money, ask yourself a simple question: Do I need this or do I want this? This is an excellent habit for reducing your monthly spending.
7. Pay off more than the minimum on your credit card debt every month.
8. Pay yourself first. Take 5 to 10 percent of every paycheck and put it into a savings or money market account.
9. If your employer offers a tax-deferred retirement account, such as a 401(k), start making regular contributions. Those dollars are subtracted from your gross annual income, lowering your income tax payments until you withdraw the funds in retirement.
10. Spend a few minutes each month thinking about your goal – a new car, a house, a child’s college education or a secure retirement. Having that perspective can help you maintain healthy financial habits as you move forward in life.
About Daivd Katz:
A nationally recognized wealth manager and financial advisor, David Katz is a regional director at Gitterman & Associates Wealth Management, LLC in Boca Raton, FL. He has extensive experience in developing investment and risk management strategies for doctors, dentists, professors and other professionals and their families.