Winning in the New Year

I don’t focus on what I’m up against. I focus on my goals and I try to ignore the rest.

– Venus Williams
Photo by Anton Darius | @theSollers on Unsplash

While New Year’s Resolutions are famous for being almost immediately broken, there are some simple things that you CAN stick with to get your financial world prepared and in order for the coming year.  Here is a quick checklist of three easy steps!  Set them up today so that you can get yourself on the path to your desired future!

  • Set up an automatic deposit to a High Yield savings account (try CapitalOne or SallieMae if you are looking for an online option, both offer decent interest rates and no minimum balances).  You can set it to automatically draw funds from your checking account on each payday so that your funds get transferred without any action required by you! (If you don’t have a checking account, please read here…. a checking account is a very basic need in the start of this process…). This is the easiest way to keep a resolution… remove your need to remember to do it!  Start small, with an amount you are comfortable trying, and set a reminder for yourself to review the amount and try to increase it each month.  This is your budding emergency fund, so HANDS OFF!
  • Work up a budget…. (I know, stop cringing… it is just a word!) You need a budget to really understand where your money is going. Many people are oblivious when it comes to how their paycheck is being spent. Maybe you are spending more on dining out than you expected? How can you know if you don’t have a baseline in the form of a budget.  There are so many good tools available to make this step so easy now!  (You can try Mint, which is free, or YNAB, which has a small monthly fee after a trial period.)  It is easier to start looking at your spending trends right at the beginning of the year. 
  • Set a few goals for yourself for the year.   Maybe it is finally killing that credit card balance so you can use those interest payments for your own needs. Maybe it is going back to school to invest in yourself, or paying off your student loans. (Try this debt payoff calculator to see how quickly you can get there.) Maybe it is to build some savings to use as a down payment on a house.  (Try this savings goal calculator.) Maybe it is to start investing in your future life goals (like owning a business) or saving for retirement.  There can be so many different goals, but if you do not set your mind to something specific, you will not be able to achieve it. 
Photo by Xan Griffin on Unsplash

Even though they seem like very simple basic steps, they can really set your mind clear on how you want to proceed into the New Year, what you are expecting out of it, and where you want to be when the year finally ends! Give yourself this chance to set a goal and feel proud of your achievement when you fulfill it!

Note: I have no affiliation or relationship with the service providers listed in this post, other than as a user or friend of a user of some of their services. These recommendations are for your research purposes only. 

Habits to Learn – Part 2

“The biggest mistake is not learning the habit of saving properly… Do not save what is left after spending; instead spend what is left after saving.”

-Warren Buffet

This is the next step towards your independence.  The first steps were in Habits to Learn –Part 1.   In that step, you made sure you had a few dollars in your pocket at all times so you can avoid bank fees and you established a checking and savings account so you can start making progress towards your emergency fund. 

It is time to fill up that emergency fund to help you get through standard “emergencies” that arise.  There are a lot of different ways to start adding funds, but first it is important to determine a goal so that you can measure your progress towards it.  How much you need to set aside depends on your situation.  If you are married with a dual income household with a spare room that you rent out for extra income, you will need a different type of emergency fund than if you are a single parent with one income and young kids relying on you.  In the first case, if there is a loss of income from one party, it is likely that you can cut costs and rely on the other income until a new job can be found.  There isn’t a great need for hearty emergency fund, but a small one for car troubles and the like is still necessary.  In the second case, it would be better to have a bigger fund.  With little ones relying on you for healthy meals and a feeling of normalcy, and with only one income to rely on, it is important to really buckle down and put your mind to having a significant fund.   These are two extremes, and your situation will likely fall between them somewhere.  

One rule of thumb is to stock your e-fund with 6 months of expenses.  This may be a daunting task that could make you feel like you will never reach the goal.  I suggest, instead, start small.  Get $500 into that e-fund as quickly as possible.   It isn’t as hard to do as you might expect. 

  • Decide on a set amount that you can take from each pay check and send directly to your savings account.  Set up a direct transfer from your paycheck through your HR department at work if possible.  If not, then set up an automatic withdraw from your checking account. Start with at least $10 per pay period and get the funds into that savings. Don’t touch them for any reason! This isn’t for food or for a night out at a restaurant.  It is an emergency only fund. Discipline yourself to use it in that way only. 
  • Now, take a look around your house and see if you have any items that are not being put to good use.  There are a number of internet sites that allow you to list your items for sale. There are many websites that will buy books straight off of your bookshelf. Using these is usually quite easy, with the sites providing you a shipping label and instructions on how to package the books so they arrive in good condition. (try BookScouter  or If you have text books,these can possibly bring a decent chunk to add straight towards that $500 goal. 
  • Take some time to meal-plan for the week, buying healthy low-cost ingredients to make your family healthy meals at home instead of paying a premium for meals out at restaurants or fast food meals (which seem cheap, but really are NOT!).  This is a fast way to save money if you normally eat out a lot.  
  • Now, take a look at your bills.  The reoccurring bills can almost ALWAYS be cut down.  Call you electric/gas company and ask them to put you on a budget plan.  Ask them if they have any advise or packages available that will help you reduce your energy usage. Some have discounted high efficiency light bulbs for a great discount. Some will send you out a free package of insulating strips to put in doorways and around light fixtures that reduce draft and energy losses.  After the electric company, contact your cable company (if you still have cable…. Everyone is cutting the cord no-a-days!)and have it CANCELLED! Even if that is difficult at this time, savings can be over a hundred dollars per month in many cases. You can find free/very cheap television entertainment with just internet access (Hulu, Netflix and the like.) Call your auto insurance company and ask them to reduce your rate.  Even if they can only find $5 in savings,take it!  Look at your other bills with this same fine-tooth-comb mindset and you may be amazed just how much you can take off of your monthly costs.  There are cell phone services like Republic Wireless, T-mobile, Cricket Wireless and others that offer acceptable services at a fraction of the cost of some of the bigger names. Even if there is a fee for cancelling your contract early, if you do the math, most of the time it is still scientifically cheaper to change to a low cost cell service company.  Do not cancel legally required coverage (like auto insurance), but cut back as much as you can.  You may find that you can add another $50-$150 per month to the e-fund just from these savings alone! 
Photo by rawpixel on Unsplash
  • At work, if reviews for raises are coming up soon, start making a list of all of the responsibilities you have currently.  Think of and write down any instances where you have saved the company money (ie. Finding correctable errors,finding better rates, arranging things in the office/warehouse that add efficiency or speed to some processes…). When you sit down to discuss your performance review and raise amount,bring this list with you and be prepared to discuss why you think you are worth more.  If your company isn’t in a position to offer a decent wage raise, they may be able to offer some other type of perk that saves you money. For example, if you find that you are using your personal cell phone for work purposes constantly, ask for the company to provide a company cell for you to use.  Then cut your personal cell phone back to the bare minimum.  Everyone goes to work to make money.  Your employer knows that just as well as you do, and if you can show them your worth, most good managers will be willing to improve your raise, even if only slightly, which builds on itself with your next percentage raise or percentage bonus you receive.

All of these things will not only accelerate your path to a full emergency fund, it will set your life up to be cheaper on the baseline.  This new “normal” cost of living will change your perspective on how much things should cost.  You may find that you would feel better with $1,000 or more in your e-fund.  Shift your goals to be what feels right for you. 

Any other suggestions, please comment!

Note: I have no affiliation or relationship with the service providers listed in this post, other than as a user or friend of a user of some of their services. These recommendations are for your research purposes only.  I do have a link to get you a discount on service from Republic Wireless if you are interested…. Join using my link and get $20 off your first bill:

Habits to Learn – Part 1

Photo by Johny vino on Unsplash

Make a habit of carrying a small amount of cash with you.  It seems that with the introduction of the ATM card, and the advertising teams that banks hired to market the idea that using an ATM card is the “same as using cash”, most of American has succumb to this idea.  It is NOT the same.  There are usually convenience fees involved to withdraw your money, fees from vendors, fees for processing the exchange,and possible overdraft fees… it is certainly not the same as cash.  Carrying a bit of cash will minimize the need for all of these fees.  Have you ever noticed that those machines usually only dispense $20 bills?  What if you only wanted $10 to have on hand if you or your children needed something small, like a drink or some kind of treat?  If you don’t have cash, you would stop at the ATM machine, giving you twice as much money and likely charging you a convenience fee to get it.  Now, are you more likely to spend more money since you have a $20 on you instead of a $10?  A rule of thumb that may be useful is to always have two $5.00 bills in your pocket or wallet at all times.  Stop at the bank and take out $50.00, asks for it all in $5.00 bills and I keep it in an envelope at home.  You will never feel broke or deprived when you have cash to spend, but limiting the amount and the convenience fees involved with getting to it is the key factor that will saving you money.

Always understand the rules of your bank account. For example, many banks charges a fee of $15.00 or more per month if your account drops below $100.00.  Don’t give your money away!  You earned it and deserve to spend every penny of it.

There are some people who can use credit cards without having any issues.  Credit cards are very different than bank ATM cards.  AFTER you get a good grip on your budget and have established a good emergency fund and good money habits, then you may want to look into the perks offered by credit card companies.  The biggest problem with credit cards is when people use them to compensate for their terrible budgeting skills.  If you cannot pay your credit card balance off in full at the end of each month, then you should not use credit cards.  (The only time this is not true is if you make a large purchase on a card that has a “NO INTEREST for x-number of months” offer…. And you pay equal amounts of the total bill each month so that it is paid the month before that NO INTEREST deal expires… there are no other exceptions!)

If you already find that you have credit card debt that you are not able to pay off (in full) when the bill is due, you are already in an emergency state! It is OK, because you are going to fix it, but it must be your absolute priority to get rid of that credit card debt.  Nothing gets on my nerves worse than when people get taken advantage of when they are vulnerable, and being nickle and dimed by credit card fees is a prime example of this.  If you are paying interest to credit card companies, you are losing your hard-earned money into a black hole and you are getting absolutely nothing for it. 

Keep going with Habits to Learn – Part 2!