NORFOLK, Va. — Before a new year, people talk a lot about resolutions.
They set goals of eating healthier, spending more time with family, and getting their finances on track. However, after a few months, many resolutions fall by the wayside and people fall back into their old habits.
Don't let that be you in 2024 — stay on track with your financial goals and finish the year with more money in your savings than you started with. Accomplishing that has a lot to do with your daily choices and spending habits.
Problem Solvers
Overspending during the holidays? Here's how to manage your debt in 2024
Nigel Robertson knows that well. At just 20 years old, he has been approved to own a home and his credit is above average.
"The way that I got my credit to where it is is pretty much - I took a bill and then I dedicated that bill to a specific credit card and I didn't spend anything else on that credit card," says Nigel Robertson.
He tells me he learned this discipline from the Young Investors Group, which is a local nonprofit that teaches young people how to spend and save money.
Robertson says setting up a spending tracker also helped.
"So, every single time I swipe a card, I get a notification on my phone. It makes a vibration and I see a notification," he says.
While that's a good start, I called up Diane King Hall for more advice. She’s the Founder of Your Money Call.
I asked her what financial habits we need to leave behind in 2023. She offers these tips:
Make a budget and don't spend more than you make
King Hall says, "Spending more than you make – that's a habit we want to leave behind... We want to spend less than we make and break up with debt - it's holding you back."
You need to understand your monthly income, the cost of your fixed bills, and your variable costs.
"Whether it's writing it down or logging it in an app or an Excel spreadsheet, yes, you are tracking every single [dime] that goes in and out [of your checking or savings account]," King Hall says.
King Hall says in addition to making a budget, you need to write down your goals and have an accountability partner.
Your accountability partner can be your spouse or just someone you trust with your finances.
Check your accounts weekly
King Hall says you need to be aware of how much money is going in and out of your accounts.
"I would say my biggest advice is don't take the approach [of] 'the ostrich effect,' of just sticking your head in the sand. Whether you get notifications for your checking [or] your bank account [or] your credit card statements regularly, you need to be aware of what your spending is," she says.
At a minimum, you should be checking your statements weekly. This also helps cut down on fraud if your account were to be compromised.
We all know life is unpredictable, so if something unexpected happens, you want to have emergency savings that can cover three to six months of living expenses.
"If you don't have an emergency savings account, then that in-and-of-itself is an emergency," she says.
Take advantage of investing
"I want to make sure that people are investing in their 401(k), their 403(b), Roth IRA, and IRA," King Hall says.
The majority of companies match your retirement contributions, so the more you add, the more money you'll accumulate over time.
She says, "Let's say your company matches 5% or 6%. At a minimum, you're putting that aside out of your check each month, each pay cycle, into that investment plan, because you are preparing for your future, and you're losing out on free money if you're not taking advantage of that. The idea is you want to max that out. The limits have increased this year for your 401(k) and for your 403(b). This year, the level is $23,000, so you can set aside as much as $23,000."
Also, put your money in a high-yield savings account. Some high-yield savings accounts are sitting at more than 5% interest now:
- TAB Bank is giving 5.27%
- My Banking Direct is giving 5.35%
- Marcus by Goldman Sachs is giving 4.5%
King Hall says that you don't need a lot of money to invest. She tells me you can start investing with as little as $100, and the payoff is worth it.
"The time that you have in the market will allow your money to accelerate faster rather than, let's say, you wait 10 years," she says.
Use budgeting apps
King Hall says she has been using Simplify, in part, because they are offering a few free months for new users.
"I also use EveryDollar. That's a fantastic app that gives you a free version and a paid version. The free version, you have to tack and input your information yourself [but it's very easy]," she says.
According to the company, in the first month of budgeting with EveryDollar, you can expect to find an extra $395 hiding in plain sight and cut your monthly expenses by 9%.
"In terms of budgeting apps, if you were using one and you find that you're kind of bored with that one, try a new one this year. That can get you re-excited about the process of budgeting again," she says.
If you have a consumer issue, when it comes to your finances, and you want the Problem Solvers to look into it, email problemsolvers@wtkr.com.
Problem Solvers
