7 Ways to Give Your Financial Situation a Jump Start for the New Year

It’s November now, and the end of the year always gets me thinking about MONEY. Not just because of holiday spending (which by the way will likely average over $1200 for Americans according to this report) but because the New Year brings a new opportunity to give your money situation a fresh start.

January is the season of resolutions, and while I prefer S.M.A.R.T. (Specific, Measurable, Achievable, Relevant, Time-Based) goals over the traditional resolution, I do think that November is the perfect time to start thinking about how you’ll better your financial situation in the New Year.

Here are seven things you can do to change your money situation in the coming year.

1. Take the Time to Create Specific Goals That Pertain to YOUR Dreams

If you look around at traditional goals and resolutions, you’ll usually see the same old stuff: save money, reduce debt, live on a budget, etc.

While those are wise words and I’ve given that advice myself many times, I think it’s also important to take some serious time to figure out what YOU want for your life instead of what others tell you you should strive to achieve.

Every time I read about a successful person, somewhere along the way they mention that many people told them it was impossible to do what they wanted to do.

Walt Disney. Henry Ford. Ben Carson. Nearly every single highly successful entrepreneur or person who has achieved above average goals got major flack for wanting to “swim upstream”.

The question you need to ask yourself is “What do I want to do with my life?” It may be something unconventional, like retiring early or starting a new career or building enough wealth to travel the world.

Recommended Reading: You CAN Retire Early

It may require a lofty goal. It may be something no one has ever done. SO what? If you’re willing to create a concrete plan and carry it through, why not go for it?

It’s time to stop living the way the world tells you to, or the safest way, or the “go with the flow” way. Take some time to figure out what your true dreams are, and then start creating a realistic plan to achieve them.

2. Start Living With a Money Plan

Instead of a budget (or maybe along with a budget) I like to work off of a money plan. The two aren’t entirely different except that attached to my money plan is a “why”: my family’s dreams.Β 

What’s great about using a money plan (or budget) that is attached to your dreams is that those dreams give you fuel to spend your money on things that are truly important to you.

For example, before we had written goals and dreams, we spent a LOT of money on dining out. It was a stress release for us and we used it often.

Now that we’ve taken the time to figure out what we were so stressed about, to discover our true dreams, and to make a money plan that is helping us achieve those dreams, we rarely (as in once a month max) spend money on dining out.

Why? It doesn’t bring us joy. Getting closer to our dreams, however, brings us immense joy.

So, in order to create a successful money plan, your plan has to include spending your money on things that will bring you closer to achieving your dreams and not spending money on things that don’t truly bring you joy or happiness.

3. Practice a Higher Level of Self-Discipline

Self-discipline is an amazing trait. In today’s world, it seems it’s become the norm to follow one’s fancies and whims and do whatever one wants to do. Self-discipline is looked at as a ball and chain.

The problem with that is that it can very easily lead to a mediocre life. Or worse.

If you follow your food cravings and whims over a long period of time you can end up suffering from horrible diseases such as Type 2 Diabetes, Heart Disease or High Blood Pressure.

If you follow your cravings for new and shiny stuff over a long period of time you can end up in tens of thousands of dollars (or more) in debt.

However, if you make a habit of practicing self discipline in all areas of your life (hint: slow and steady wins the race.) you can methodically work to better many areas of your life. For example:

  • Practicing moderation in diet by eating more whole foods and resisting cravings for junk food can result in a healthier body
  • Practicing discipline in spending and saying “no” to unnecessary expenditures can result in a plushier savings account or a lower (or nonexistent) debt obligation.
  • Practicing discipline in exercise by forcing yourself to do 5, 10 or 15 minutes of exercise a day and then moving upward from there can transform your health and your body.
  • Practicing discipline of your words and working to speak kind, positive and loving words to yourself and those around you can improve your relationships and your own self-esteem.

Self-discipline is a trait that leads to, among other things, achievement of goals and dreams. It can make your life better all the way around.

The more in control you are of yourself, the better your life can be.

4. Boost Your Savings Rate

Okay, there is literally nothing bad about having more money in savings. On the contrary, it can bring you a serious sense of peace.

When we were deep in debt and had nothing in savings, every day was filled with struggle and fear. Every unexpected expense brought us into panic.

As we worked at paying down our consumer debt, we also worked at saving money. At first it was only 1% of our income. Then we moved it up to 2% and so on.

Now that we’ve got a few thousand in savings our stress level is pretty much non-existent. Even though we still have debt left to pay off, knowing that we’ve got a cushion for unexpecteds and won’t have to go back into debt to pay them has given us an enormous sense of peace.

Start saving more money today, even if it’s just a few more dollars each paycheck.

5. Make a Serious Effort at Reducing Debt

Debt can be a serious chain around your neck. While some debt can be helpful, as in mortgage debt for instance, consumer debt is often the result of not disciplining yourself when it comes to spending.

That can lead to a vicious, never-ending circle of credit card balances. It can even lead to mortgage trouble if you’re consolidating your credit cards into a home equity product on a regular basis. It’s not always smart to consolidate or refinance consumer debt.

A better option is to make a New Year’s goal to put a serious dent in your debt balances – or to eliminate them altogether. Again, you’ll likely find your level of stress plummeting if you choose to do so.

6. Get a Clear Picture of Your Retirement Situation

Retirement savings is a hot button issue these days. With so many people being short on retirement savings (estimates say up to 75% of Americans aren’t saving enough for retirement), our country could be headed for seriously troubled economic times in the future.

Take some time before year-end to take a serious look at how much you have saved for retirement and to determine if you’re saving enough.

In my humble opinion, it’s always better to over-save than to under-save for retirement. Medical costs and other issues can eat up retirement savings pretty quickly, so it’s a good idea for you to make retirement savings a priority.

7. Be Willing to Take Risks

I used to be terrified of rocking the boat, and so did Rick. Keeping things calm, sane and safe didn’t get us very far because the truth was that we were ruled by fear.

That fear, as much as we tried to be riskless, caused us to make several decisions that put our family into a monetary mess. And it put us in jobs that we hated and a pretty boring life all the way around.

NOW, not all risk is good. But calculated, planned, well-thought-out risk is a requirement for reaching your dreams. Your risks might be different from mine.

A risk for you might be going back to college, trying a new career or taking a chance on your own business. It might be moving to a different state or country to live.

It might be selling your home to buy a much smaller home so you can live a debt free life, while all of the neighbors gasp and gossip about your “sad” situation.

Let me tell you: living a life of debt freedom in a smaller house is MUCH, MUCH better than living a life in a mansion tied to a mortgage that has you running on empty. Just ask Brad. Brad and his wife sold their mansion so they could retire early, and are now living life on their terms.

It’s scary to move out of your comfort zone and your status quo. But if done right and with proper forethought, it can lead to some pretty amazing things.

It’s never the wrong time to give your financial life or personal life a new beginning. So start planning now.

19 comments

  1. Awesome post. And I can’t believe the new year is almost upon us. Time really flies!! Great point about asking what you want with your life? It seems so obvious but I think too often we assume that we know and don’t put too much thought into it. However, a lot of us don’t think about it and end up living a life that society, our parents, etc., say we should live. When you really think about what you truly want in life, you start living intentionally and make conscious decisions to get to your goals. And the last one is something I’ve been working on too. Taking risks can be scary, but sometimes there’s a risk of not taking risks! You miss out on many opportunities.

    • Laurie says:

      Great comment, Andrew! I think it’s so easy to just go through life day to day and not think about bigger things, you know? The New Year is a great time to do just that!

  2. Erik says:

    It’s a must to start with why. I love your list.

    I’m going to do a 12 days of personal finance, one of the days, I want to be an interview post. Can I write up a few questions and send it over for the interview?

  3. Bonnie says:

    Easily one of my favorite posts of the year, on any blog. Thank you! I was just thinking today on the way in to work about how it’s the beginning the month, which is always a good time for a small fresh start, but that we are also nearing the end of the year, which means, of course, a chance for a huge fresh start in the new year. This was just what I needed!

  4. I always love your advice Laurie! This: “The question you need to ask yourself is β€œWhat do I want to do with my life?” So true! It’s always hard work to go against the norm or what others think you should do with your life. But you only get this one life. I think it’s one of the regrets of the dying: not being true to oneself!

  5. Mackenzie says:

    “Make a serious effort at reducing debt”. I really agree with this one Laurie, the future just seems so uncertain right now, it is best to be prepared and one way to do that is to reduce your debt.

  6. Your last point is the one I want to take in to 2018. I would like to take some risks, especially if markets take a dip next year. Maybe an arbitrage play with a 0% credit card…

  7. One of my favorite new years goals for new savers is the 52 week challenge. Save $1 on week 1, $2 on week two, $3 on week three… all the way to next December when on week 52 you’re saving $52/week. Its a great way for new savers to boost their savings rate in a slow gradual way.

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