Come see Haultail at Orgill Spring Market, February 27-29, 2020; Orange County Convention Center, Orlando, Fla.

Make Your 2020 Money Resolutions Come True Using These Five Tricks

Family

WalletHub conducted a recent survey that showed round 99 million Americans will make a New Year’s resolution involving money. This could be to create an emergency fund, pay down your debt, or get smarter with month as a whole. Whatever your resolution, over 80% of them fail by the second week of February. So, how do you make your resolution stick and pave the way for better financial health in 2020? These simple tricks can help.

Set Up a Debt Payment Strategy

Instead of saying you’re going to pay down your debt, get specific. How do you plan to pay off your debt? Maybe you have $10,000 in credit card debt, and you decide you want to pay off at least 20% by the end of the year.

That would be $2,000 for the year, and $167 per month. Decide on your debt payment strategy. One big one I’ve used to pay down my student loan debt is the snowball method.

With the snowball method, you take your lowest balance and throw any extra money at it. Once you pay it off, move to the next smallest debt. It’ll snowball, and you’ll cut away at your debt. If you have multiple credit cards or loan payments, this works well.

Create Specific Goals

When you create resolutions, are they vague or specific? Most people choose vague. For example, they decide they want to lose weight, and they set this as their goal. But, how much weight? Technically, they could lose a pound and satisfy their vague resolution. Instead, be specific. Say you want to lose 20 or 30 pounds and set up milestones.

Each time you lose 5 or 10 pounds, reward yourself. This will give you something to work toward, and it’ll help you keep focus on your resolution. If you want to start an emergency fund, start with a manageable amount. This could be $500 or $5,000. Decide how much you need to put away each month to hit your goal by 2021.

For some people, employers offer the ability to split paychecks. Have a portion of your paycheck go into an emergency fund. I know I put $100 into a separate savings account every check, and it goes there automatically so I’m not tempted to spend it. You can’t miss what you don’t have, and it’s saved me over $2,000 in the past year.

Get Serious About Your Spending

Where does your money go each month? Can you account for it, or are you one of those people who has no idea where your money vanished too? If so, you’re not alone. Roughly 61% of Americans don’t keep a budget, and they have no clue where they spend their money.

Start keeping track of everything you spend for the first two months of 2020. Don’t change your spending habits, but track it. If you’re worried about forgetting, try Mint. You can hook it right to your bank account, and it’ll keep track of what you spend out of your bank account.

At the end of 60 days, look back at your spending and find your biggest areas. Maybe you buy a coffee or two each day or you routinely buy lunch for your coworkers. Whatever your biggest categories are, try cutting your spending down in these areas by 10% to 15%. Using this method doesn’t box you in with spending categories, and you can still spend a little on whatever you like.

Increase Your Retirement Contributions by 1%

If you typically put 3%, 5%, or even 15% of your salary into your retirement account each year, push the envelope a little more and contribute 1% more starting in January. Every January, increase your contribution by 1%. This way, you won’t miss the money, and your savings will go up when you get a raise.

While 1% doesn’t seem like a lot in the grand scheme of things, if you earn the average full-time wage of $919 every week ($47,788 annually), you’ll stock away around $478 more each year in your retirement account. If your employer doesn’t offer a 401k but you have a Roth IRA or an IRA, consider the same strategy.

Double-Check Your Tax Withholdings

The IRS is going to launch their redesigned W-4 form, and this form helps employers ensure they’re collecting the correct tax amount from your wages. You won’t need to file a new one if you already have one with your employer, but you do want to double-check your withholdings.

Common reasons to adjust your withholdings include a large tax bill or refund the last year, employment status change, divorce, marriage, or dependent number change.

Nothing hurts more than working so hard to create a healthy savings account all year and having the IRS come and wipe it out in April. If you get a larger tax refund, not checking your withholding is like giving them an interest-free loan all year long.

Go into 2020 with the right attitude, a lot of determination, and a little luck. You’ll be surprised to see how your financial health improves.

 

This article was originally published by Rose Valerios, medium.com