It’s March, and you’ve already given up on your New Year’s resolution to get in shape. Well, maybe you’ve sidestepped your goal of losing five pounds or making it to the gym three days a week or biking to work instead of driving… But that doesn’t mean you can’t start today with a new target: getting your finances in shape.
If that sounds daunting, just remember baby steps! Nothing’s built in a day (except maybe those Amish barns). Approaching it one day at a time is a great way reach financial success.
Let’s take a peek at 10 simple, five-minute actions you can take to get closer to your financial goals. Plan to implement one a day for the next 10 days – and by the end of the month, you could be pumping real financial iron.
1. Start a coin jar. Instead of recycling your old coffee can, put it to better reuse: Turn it into a coin jar. At bedtime, empty all the coins you accumulated throughout the day into the collection jar. Maybe it’s only a couple pennies on one day, but a handful of quarters the next. Seal the jar so you can’t tap into it for any withdrawals for a predetermined amount of time. You’ll be amazed how all that loose change can add up!
2. Deposit a daily dollar. Once your coin jar is going strong, consider ALSO pulling out one dollar at the end of the day. At the end of each week, deposit those seven bills into the bank. If a weekly trip to the bank isn’t feasible, stow those ones in an envelope (out of sight!) for a larger deposit at the end of the month. Once you see how you’re doing with the daily dollar, try to boost to two dollars a day. Whatever amount you decide, make it consistent to make it stick.
3. Unsubscribe from sales emails. Brilliant in its simplicity, this step just requires a couple additional clicks. You’re already looking at the message in your inbox (don’t kid yourself – your curiosity gets the better of you when you read “Flash Sale – One Day Only” from your favorite online shoe store!), so take the added measure to hit “unsubscribe.” Help yourself by eliminating the temptation to spend.
4. Automate your savings. It’s challenging to create a savings habit. It’s too easy to fall into the trap of “I’ll do it later” and “I can’t afford to put anything away this month.” But yes you can! One easy way is to take the choice out of your hands. If your employer direct-deposits your paychecks, request that a portion be deposited into a high-yield savings account that you don’t regularly access. If you don’t have direct deposit, call your bank and set up your own automatic transfer arrangement to move a certain amount out of your “daily-use” checking into savings.
And keep in mind that it needn’t be thousands of dollars each time! Even $20 or $50 will make a difference in the long run.
5. Automate your payments. Choose one item (be it your monthly car payment, your mortgage, your cellphone bill, or another regular and consistent payment), and set up a direct payment. This completely erases the chance you’ll be late on that payment ever again.
6. Automate your reminders. You didn’t intentionally skip your credit card payment, but with everything else going on, it slipped your mind. Don’t let this happen again – set up automatic alerts with all of your creditors. These days, virtually every lender enables text or email alerts for your credit cards, student loans, or any other financial account. If you’re already using their online features, you should have no problem completing this in a few short minutes. And the benefits of avoiding future missed payments and resulting fees make it well worth your time.
7. Bank digitally. Sure, you’re diligent about recording your posted checks and reviewing your monthly bank statements. But take it one step further: If your bank has an app, download it! Having that at the ready could help you become more mindful of your spending habits. Spend just one minute a day checking your account balances and transactions. Not only will you start to notice obvious patterns in your spending – and places where you could easily cut back – you’ll also be able to react more quickly and effectively against fraudulent charges.
8. Limit lunch spending by cashing out. For many of us, lunch is a daily expense. Rein in your costs by allotting yourself a weekly lunch allowance in cash. Once you’ve spent it all, it’s gone – resort to PB&J for the rest of the week instead of pulling out the plastic. (You can certainly choose a different expense, perhaps your regular morning coffee on the way into the office or that mid-afternoon vending machine granola bar.)
9. Adjust your tax withholding. Who doesn’t love a tax refund? It’s a mid-year financial gift you give yourself. But this is an indicator that you might be overpaying your taxes. Unless you do this intentionally because you always plan your finances with a refund in mind, you might want to consider adjusting your tax withholding to numbers that more accurately represent your current situation. While a big lump-sum refund sure feels nice, you can boost your savings account – or pay off debts or credit card balances – by seeing more money in each paycheck.
10. Check your credit. You know how you’re supposed to check all your smoke alarms periodically, such as every time you change the clocks for daylight savings time? Well, regular check-ins about your credit will help alert you to any financial fires brewing. You can get credit reports from all three credit bureaus at www.AnnualCreditReport.com. Also, keep in mind that most banks and credit card companies will give you your credit score for free anytime you want it. Make sure there are no errors because your credit report also helps determine your credit score, the numeric representation of your credit that lenders use to determine your strength as a borrower.
Getting in financial shape isn’t about how much money you have, it’s all about what you do with that money. Even if you think you can’t afford to start saving, you might be pleasantly surprised to discover that it’s possible… no matter how little you start with. American Credit Foundation is ready to show you your financial possibilities.