As the new year is right around the corner, our thoughts turn to what we are going to do this year that we did not do last year.
Why not make 
this your year by doing the things to it takes you to be successful financially.
Being financially successful isn’t rocket science. It comes from smart money management habits and consistency.
Get the year started on the right foot by following these 5 simple tips that can have will you well on your way to financial independence.
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1. Live Below Your Means
Keeping up with the Jones’s is not only overrated but can have you making payments for years.
Interest on credit cards is often higher than 15% and can often be as high as 30%. Having credit card debt can cost you hundreds of dollars in interest payments and fees.
Even if you have zero percent interest, you are still making payments. Having the money going out of your bank account for payments, keeps you from being able to save it or invest.
Bottom line…making payments (other than mortgage or student loans payments) limit your options in life.
2. Have a Spending Plan
Know where your money is going. This can mean making a detailed budget so you know where every penny is going.
Or you can use something simple like the 50/30/20 budget (50% to needs, 30% to wants and 20% for savings).
Families that plan their spending have emergency funds, pay their bills on time and avoid unnecessary fees.
Just because you budget does not mean you cannot spend money. It just means you have to plan for it.
Live intentionally and make sure you want what you are spending your money on. Look at the price of the item or experience as hours worked.
If you make $150 a day and you want something that costs $300, is it worth 2 days of salary. If it is, add it to your spending plan and get it.
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3. Have a Savings Plan
Having money in the bank is what will keep you smiling when things are not going your way. Saving money means putting money into retirement savings.
The easiest way to save for retirement is with a 401(k) plan through your employer. A Roth IRA is another good option for retirement savings.
There are others also. Pay yourself first and you cannot go wrong.
The second part of saving is having an emergency fund. Ideally, this should be 3 – 6 months of your monthly expenses.
If you don’t already have a good start on 3 – 6 months of savings, this could take some time. Start by accumulating $1,000 as quickly as possible to avoid having to carry a balance on a credit card.
4. Make a Plan for Paying Off Debt
Debt can steal your dreams. No one wants to spend their life making payments. Some people talk about good and bad debt.
While mortgage payments and student loan payments are not as “bad” as consumer debt, at the end of the day they are all payments.
If you have credit card balances of any kind, paying those off should be a priority. Cut back on expenses, make extra money or both. Just do it.
Additionally, if you have credit card debt, I would urge you to take a deep dive into the reason why.
A person should not have more than one or two credit cards and hopefully they will have a lot of rewards.
Credit cards should be a convenience (paid off monthly) and not a burden that requires years of high interest payments.
5. Set Financial Goals
Having goals can be a big motivator. There are certain things in life that will be hard to attain if you do not plan for them.
This can mean things like having the money for a house, a child’s tuition or a dream vacation.
The beginning of the year is a great time to look at what you want to do with your money.
Set some goals for the next few months, for the next year and put some on your list that are five years or more in the future.
If you don’t plan for it, it may be difficult to achieve it. Start with goals and a plan and you will have a head start on financial success.
While you are setting goals, considering setting some for your health and your family life.
It may not always seem apparent, but our health, finances, career and family life are all intertwined.
Final Thoughts…
The new year is fast approaching and many people make resolutions to change things about their life, but most of the resolutions become a thing of the past within a few months.
Make this the year you take control of your financial life and make it what you want it to be.
Whether you take baby steps or jump start and sprint towards the finish line, the biggest step is getting started.
Get out your planner of choice and put you financial goals in writing.
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