17 ways to improve your finances in 2017

17 ways to improve your finances in 2017

The new year usually sparks many of you to want to improve your finances. Now, I’m not usually one for New Year’s Resolutions. But I’m all for focusing on your financial health. If the New Year sparks that fire within you to get your finances together – then I’m all for it!

Here are 17 ways to improve your finances in 2017. Choose a few of these to focus on in the New Year if you’re new to personal finance. I don’t want you to be overwhelmed. But I do want you to make some real change in your life.

improve your finances

Overall financial health

1. Dream a little

This may seem like fluff advice, but I really believe that dreaming/envisioning the ultimate financial state can really get you revved up to actually improve your finances! So take a moment to really imagine what it would be like to live with no more debt. To finally turn in that last payment for your mortgage, car loan, student loan, etc. Imagining this huge weight coming off of your shoulders can help you get started on actually tackling your debt!

2. Know your numbers

To improve your finances, you need to know where you are currently. Make it a point to know and be more mindful of your monthly income and expenses. Your entire personal finance journey is built with these building blocks! Here’s a video I put together on how to get this information if you don’t already have it.

3. Track your net worth

This tip goes hand-in-hand with the previous tip of knowing your numbers. Knowing your numbers is one thing, but actually tracking your numbers each and every month is what helps you be more mindful of your situation. The key here is checking in on your finances every single month, whether it’s your net worth or your income/expenses. (I hope to do a post/video on what your net worth is soon).

4. Educate yourself about personal finance

I get it – the world of personal finance can be overwhelming. But running away from it is a surefire way to not get anywhere financially. Make it a point to read a book (I recommend The Total Money Makeover by Dave Ramsey or I Will Teach You to be Rich by Ramit Sethi) or listen to a podcast (I recommend The Dave Ramsay Show or Stacking Benjamins) about personal finance once a month or so. Believe me – avoiding personal finance will not solve your personal finance problems!

5. Focus on one or two financial goals

When you focus on way too many goals at once, you tend to lose track, get overwhelmed, and fail at most of them. Choose one or two goals to focus on this year. Will you work on increasing your income or decreasing your expenses? Is this the year you get serious about your debt or start saving for emergencies? Pick a goal that will improve your finances and get started! I personally suggest following Dave Ramsey‘s step by step goals if you don’t know where to start.

6. Get in sync with your significant other

This is something Juan and I are still working through. Actually, I think this is something that will just become a constant conversation. As your goals change, your spouse’s may change as well. As you improve your finances, make sure your partner is still on the same page as you. Make an effort to check in with each other each month to make sure you’re working towards both of your goals.

Increase your income

7. Start a side hustle

Your main income is great, but having a side income can really help with your financial goals! Don’t know where to start? Think of things you already love to do – crocheting, working on cars, spending time with pets… chances are someone has already come up with a way to monetize it! Think of how you can monetize one of your hobbies so your side hustle can also be something you enjoy doing!

8. Work towards a promotion

Nine times out of ten, a promotion leads to an increase in income. Make sure you are an absolute stellar employee – make it into work on time, finish your tasks in a timely manner, and make sure all the work you do is done with integrity. Then, when a spot above you has opened up, make it known to your manager that you are interested. Work hard and your work will speak for itself!

9. Work towards and negotiate a raise

Sometimes a promotion just isn’t in the cards. That doesn’t mean you can skip asking for a raise. Make your case as to why you deserve a raise, do your research on the average salaries for job titles closest to yours, and have an honest conversation with your manager. Warning – this only works for great employees, not just any employee. Just because you want to improve your finances doesn’t mean you deserve a raise.

10. Sell some stuff

Got a ton of unused clothing, appliances, toys, etc. lying around? Donate the stuff that is already in poor condition and sell the stuff that is still in great quality! eBay is a great place to start, but there’s nothing wrong with a good ol’ fashioned garage sale. The extra cash will come in handy as you improve your finances.

Expense control

11. Give up just one thing

I’m not asking you to give up cable, coffee, soda, AND gift giving all at once (although – more power to you if you want to)! Start small – what’s one expense, big or small, you can go without for all of 2017? For me – I’m going to cut back hard on eating out. Speaking of eating out…

12. Eat out less

It’s no secret that eating out often can do a lot of damage to your waistline. But it also does a ton of damage to your wallet! I’m not saying you should eliminate eating out completely – just cut back! Juan and I are going to stick to eating out only twice a week (this is a huge step back from our normal 5-7 days a week)!

13. Find another commute option

For us 9-5ers, a commute can really make or break the budget. Take a look at what you spend now on your commute (gas, toll, train fare, etc.) and look up other options available to you. Keep in mind the cheapest option may not be the best in terms of time spent, so make sure you take into account all things – not just the price tag.

14. Cut out cable

*gasp* I know, how dare I say these words??? But let’s face it, y’all – cable is expensive! With Netflix and Hulu being at extremely affordable rates, the case for still having cable is starting to dwindle. For us, the hardest part will be finding ways to watch our Golden State Warriors and other sports broadcasting. But other than that, Netflix and Hulu usually does the trick for our TV fix.

Beef up your savings

15. Seriously, get an emergency fund

I don’t care if you’re in deep debt – get yourself a freaking emergency fund! If you don’t have on yet, building one this year will greatly improve your finances. You are not invincible and Murphy loves visiting those who aren’t prepared. Even if it’s just $1,000, it’s a great start and better than nothing.

16. Set up a personal escrow account

You know those annoying expenses that don’t happen every single month and surprise you whenever they do pop up? Setting up a personal escrow account will prepare you for all of those expenses. Pair it with automatic savings and you don’t even have to think about it!

17. Start saving for retirement

I don’t care how young you are – it’s never, ever too early to start saving for retirement! No one ever said, “Man, I really wished I waited longer until I started saving for retirement”. For starters, look and see if your employer offers a free match to your contributions into your company sponsored retirement plan. Basically – your employer will put money into your retirement plan for free as long as you’re also putting in money! Take advantage of that free money!

So there you have it – 17 things you can work on to improve your finances this year! You don’t have to do all of them – in fact, I suggest choosing just one or two of these things. Focus on a few goals at a time and you’ll be well on your way to financial peace.

What are your financial goals for 2017?

AMDG,
Lisa

The Budget Series Pt. 1 – Income and Expenses

The Budget Series Pt. 1 – Income and Expenses

It’s the beginning of 2017 and I know that some of you want to get your finances together this year! If one of your New Year’s Resolutions is to grab control of your income and expenses, I’m here to help!

I’m creating a video series called The Budget Series that will go over different budget methods for different types of people. The first video in this series is focusing on your income and expenses. More specifically, how to gather these numbers and why they’re important, no matter what budget method you choose.

Your income and expenses are vital to all kinds of budgets, whether you’re a beginner or more experienced. This series is mostly targeted to budgeting newbies, but I’m sure you’d find this helpful even if you’re more advanced.

Please watch the video below and don’t forget to like/subscribe so you don’t miss the rest of The Budget Series!

What are your budgeting struggles?  How can you improve your income and expenses this year?

AMDG,
Lisa

The Emergency Fund – The ONE THING Everyone Needs

The Emergency Fund – The ONE THING Everyone Needs

[Disclaimer: this post contains referral links.]

There were plenty of times within the last few months when I felt compelled to write this post. As I was involved in family issues and heard of friends’ transitional times, I felt the need to share this one thing.

The ONE THING everyone needs to have is an emergency fund.

Emergency Fund

Now, this isn’t news in the PF community. For those familiar with Dave Ramsey’s Baby Steps, this is Baby Step Number 1! Having an emergency fund is a no-brainer for us PF nerds.

But this post isn’t for the personal finance blogosphere. This post is for those I know who claim that personal finance just doesn’t make sense to them. This post is for those who get caught up in the confusing lingo of 401k vs. Roth IRA vs. Traditional IRA, get overwhelmed, and simply give up. This post is for those who are worried about how their finances are and have absolutely no idea where to start.

I beg urge you all – do not let the overwhelming world of personal finance stop you from setting up your emergency fund.

The very first thing everyone needs to have in their finances is an emergency fund.

What is an Emergency Fund?

An emergency fund sounds just like what it is – funds set aside specifically for emergencies. This fund is there for you when little snags in our life plans happen – when your car breaks down, when an unexpected expense pops up, or even if you fall victim to an unfortunate layoff at work. When these things happen, you’re going to want to have a little cash to help you as you’re working through it.

***Note – an emergency fund is not there for you “just in case” there’s a really great sale at Macy’s.

Now, some may argue that they don’t need an emergency fund – they can use their credit cards for emergencies. Heck – I was in that same boat not too long ago! But I’ve since switched over to having cash as an emergency fund, not credit. Having a liquid (meaning: easy to get to) emergency fund is best for emergency situations. In general, when in an emergency, you won’t want to have to worry about how to pay for things, let alone paying interest on top of whatever you have to spend. Cash is king in this situation, my friends.

How Much Should I Have in My Emergency Fund?

There are a lot of factors that determine how much you should have in your emergency fund. But at the bare minimum, you need to have $1,000.00 set aside for emergencies. In fact, that’s what I have in my emergency fund as of right now!

For higher risk situations – freelancers, families, etc. –  you’re going to want to have a bigger emergency fund set aside. Many suggest having an emergency fund consisting of 3 to 6 months worth of expenses.

But those of us who are single and have no dependents, $1,000 is a great start. If you’re debt free – having 3 to 6 months worth of expenses is a great idea. If you’re still in debt, though (ahem like me), the bare minimum of $1,000 will do until you climb out of your debt.

Ultimately – you should at least have $1,000 in the bank. After that point is really up to you and your situation. The amount you have set aside for emergencies should help you sleep at night, not keep you up.

Where Should I Put My Emergency Fund?

You’re going to want to keep your emergency funds close so that the money is easily attainable when emergencies happen. But you don’t want your emergency fund too close in case you get the temptation to use the funds as something other than an emergency.

**Note – Do not put your emergency funds in time-restricted accounts such as CDs (Certificates of Deposit). CDs are really meant for investing, not for emergencies. Plus, there are penalties for withdrawing money early from CDs.

My emergency fund is at Capital One 360, but really you can have yours wherever you prefer. A good place to start is to see if the bank your current checking account is at offers savings accounts.

I have a separate savings account set up in my Capital One 360 account just for emergencies. It’s close enough that I can access the money without any penalties. I would still have to transfer the money from my savings account into my checking account to access it with my debit card. This transfer step, although very easy, allows me to really reflect on whether this is really an emergency or not.

I get that personal finance can be overwhelming. But please, please, please – take the time to set up your emergency fund! This is step one to financial peace. Once your emergency fund is in place, then we can start worrying about all the other stuff – debt repayment, retirement savings, etc.

AMDG,
Lisa

August 2014 – Expense Tracking Results

Last month, I vowed to start tracking my expenses after seeing my credit card debt yet again grow more than I was throwing at it.

Midway through my own personal challenge, I shared with y’all just how hard it was to track expenses at all.

To top it all off, I recently just got engaged, which means I need to be that much more mindful of my spending! Not only do I need to save up for a wedding, but most importantly, I need to save up for our future life together!

After weeks of keeping literally all of my receipts and diligently keeping record of every time I swiped, the results are in.

Let me tell you right now – the results ain’t pretty, y’all.

All in all – I spent about $4,613.84 last month. Here’s the breakdown of my August 2014 expense tracking:

August 2014 spendingSome observations

The majority of my expenses, $1,576.41 to be exact, is being thrown at my credit card debt. Which isn’t necessarily a bad thing – I want that debt gone ASAP! However, since I’m still spending money on my credit cards, paying this much toward the balances feels like trying to fill up a pool that has several leaks/holes in it – it’s counter productive!

So how do I make paying off my debt more productive? I need to fill in these leaks/holes. I need to stop using my credit cards! 

Commuting costs are the next highest expense at $564.19. This amount includes gas, tolls, parking, and BART fare. Not only does my commute take up a huge chunk of my day, it takes up a huge part of my budget. Unfortunately, there isn’t much I can do about this expense. For now…

I pay about $500 per month towards the house – this includes mortgage, HOA, electricity, cable, etc. Not bad considering I’m splitting all these costs with my brother, mom, and auntie. Don’t think I’m changing anything in this category quite yet.

Retirement savings sits at $463.64 per month. This is the amount I need to max out my Roth IRA for the year.

My monthly car loan payment is $372.81 and my monthly car insurance payment is $154.67Yikes. This is what happens when you finance a brand new car, folks. As far as the car loan payment, there’s not much I can do. But I do plan on re-evaluating my car insurance – whether it means paying for the year in advance to save some money, or even jumping to a new provider, I plan on lowering this monthly amount by the end of the year!

I spent $203.23 on Merchandise and $162.95 on Restaurants in August. This is above the regular $120 in cash I withdraw each month for my regular “play” money. I definitely plan on cutting back on these categories. These were all unplanned and unnecessary purchases. If I can keep these kinds of purchases down to the planned cash of $120/month, I can really save some serious money this way.

Currently, I’m throwing $200 at my student loans and I plan on keeping it that way for a while. I’ve rounded my minimum payment to the next $100 increment, so I’m overpaying right now, but it’s still a manageable level for me. No change needed.

In August, I put $100 toward my travel savings, mainly toward my “fun money” for #FinCon14! This category will definitely increase and shift in the next few weeks, especially because I have a wedding to plan and pay for!

Seeing the naked truth behind my spending was incredibly eye-opening. Personally, I don’t think I can keep tracking expenses in this way in the long run, but I know I’m going to be a lot more aware of where I spend my money.

Action items:

-Stop using credit cards!!!

-Look into lowering car insurance payments

-Keep Merchandise and Restaurant spending limited to allotted “Play Money” of $120 per month.

In the coming weeks, I’ll be updating y’all on how I plan to change my budget/expenses to accommodate for The H2B (new nickname, thanks Daniel!) and my engagement/wedding festivities.

Maintaining Friendships on a Budget

Something changes when you stop going to school.

All of a sudden, you barely have time to see your friends. Your schedules never seem to line up. When you’re free one night, your friend is studying or working the night shift. When you’re busy with family one weekend, your friends are asking if you’re free to hang out. It almost never seems to work out!

But when it does work for everyone’s schedule, you tend to go out to eat at a restaurant that isn’t exactly at your price point. You don’t want to be considered the cheap one, so you go along with it and order more food/drinks than you can handle. You justify it by saying you haven’t seen so-and-so for a long time and you throw your budget out for the night.

The next thing you know, you’re looking at your empty wallet and your credit card statements. I spent HOW MUCH at the bar the other night? Those mediocre appetizers/entrees cost me $50 total for the night? The numbers don’t lie, honey.

I know how exciting it is to finally catch up with someone you haven’t seen in a long time. But that doesn’t mean it’s an excuse to splurge every time it happens! Maintaining friendships is definitely an important part of young adulthood, if not life. But don’t let “maintaining friendships” become an expensive category in your budget. Here’s are 3 ways I’m maintaining friendships on a budget.

Board Game Nights

I’ve mentioned before that my friends are super into board game nights right now.Having a board game night is an easy and cheap way to gather a group of people for a fun night of catching up and creating new memories. For food, it’s either a) BYOF – bring your own food, b) bring food to share, or c) we all pitch in for pizza. Either way, it never gets too expensive for any of us. Just bring any games you have at home. Heck, even a deck of cards can make for a fun night. Here are some of our favorite board games right now: Settlers of Catan, King of Tokyo, Resistance Avalon, and Coup.

Walks/Runs

I’m not much of a runner, so I’m adding walking in here 🙂 Walks/runs are great ways to catch up with someone you haven’t seen in a while. Instead of sitting at a noisy bar or restaurant, go for a nice walk along a trail or nearby neighborhood. Not only do you get your exercise in, but you actually have the time to talk to one another without being interrupted by hasty waiters or rude customers surrounding you.

Share a Treat

Usually, I like to paint my own nails – mostly to save some money. But every few months or so, I splurge and let myself enjoy a professional mani/pedi at an actual nail salon. It’s my quarterly “treat” to myself. Instead of enjoying these treats all by myself, occasionally I’ll invite one of my girls to come along with me. I admit, I prefer to go by myself most times (the introvert in me loves the alone time) but other times, when I know a friend of mine has been stressed lately, I’ll invite her to come along and get mani/pedis together. Your special treat may not be mani/pedis every months. You may go fishing every few months, or you may make the trek out to a nice beach/scenic area every once in a while. “Me time” is important, but sometimes it’s great to share a treat with someone you haven’t seen in a while.

When all else fails…

Go out and have that dinner or that night out bar hopping. Just don’t be afraid to let your friends know your limit as far as your budget goes. Bring cash, and leave the credit cards at home! Most of all, whatever you choose to do, enjoy the presence of your friends. You don’t need to spend tons of money to enjoy each others’ company. — How are you maintaining friendships on a budget?

AMDG, Lisa
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