Two weeks ago, part one of this article identified the first six of 12 specific strategies to help you keep your New Year’s financial resolutions and make 2015 the year you build a more financially secure future. Those six strategies were:
• Focus on saving, not on budgeting .
• Get serious about paying down debt .
• Hold a family meeting to set long-term
financial goals .
• Consider what really, truly brings you joy
• Rethink what you’re calling “necessities.”
• Make sustainable small changes.
• Here are six more tips to complete the dozen:
Start paying attention
A lot of our spending tends to happen while we’re asleep at the wheel, so to speak. We sign up for expenses like cell phone plans and Internet services…and then forget about them. (If payments are set up for autodraft, we may completely forget about them.) Take a closer look at these regular expenses. Is there a more affordable option out there? Are you paying for features you don’t use?
Other ways to pay attention include watching sales circulars and using coupons. Eat what’s in your freezer instead of ordering a pizza. Commit to not buying clothes for the next three months, and dig through your closet to find some clothing you forgot you had.
Pay in cash whenever you can
Research has shown that we spend roughly 15 percent more when we pay with a credit card as opposed to using cash. If you have to reach into your wallet and count out bills in order to pay for a meal or an impulse buy at a retail store, you might just decide that it isn’t worth the money after all.
Avoid seasonal entitlement traps
We work hard throughout the year, so it’s easy to convince ourselves that we “deserve” a lavish vacation each summer and a no-holds-barred holiday celebration. But the truth is, you don’t need to spend a fortune to relax, have fun, and make great memories with your family.
Consider vacation options within a 200-mile radius. This might be a state park that you have never explored or a nearby small town. Consider taking more day or weekend trips in place of a major, expensive vacation.
Focus more on experiences and less on things
From eating at expensive restaurants to making sure our homes are decked out with flat-screen TVs and sound systems, most of us don’t mind pulling out our wallets in the name of enjoyment. (And often, we don’t worry about the price tag until it’s too late.) But psychology shows that experiences are always more impactful on our happiness than things.
Do some soul searching before you get out the credit cards. For instance, cooking a meal together as a family might bring all of you more joy than piling into the car and ordering from yet another overpriced menu.”
Get real about kids’ needs
Stylish designer fashion. Electronic gadgets and all their upgrades. Summer camps. Traveling sports teams. Music, dance, and gymnastics lessons. Be honest: Is an alarming percentage of your budget going toward your kids’ activities and desires? And how much enrichment are your children really receiving?
Don’t hesitate to call in the professionals
If you’re not sure where to start, which budget changes would be most effective, or how best to begin paying down debt, talk to a financial advisor. Your financial advisor can help you make sound financial decisions now and in the future. And remember, the more honest you are about your current situation and your financial goals, the more helpful your advisor can be.
Don’t feel that you have to enact all of these strategies at once — pick one or two that you feel would be easiest to accomplish and start with them. Soon, you’ll probably be inspired to make a few more changes and so on and so forth.
You can make tremendous progress during 2015 if you start now, and by January 1 of 2016, your financial reality will look positively, radically different.
Donna Skeels Cygan, CFP®, MBA, is the owner of the financial advisory firm Sage Future Financial, LLC, and the author of The Joy of Financial Security: The art and science of becoming happier, managing your money wisely, and creating a secure financial future. To learn more, visit www.joyoffinancialsecurity.com.