10 Quick Steps to Improve Your 2018 Finances

The New Year is here and after exhausting yourself physically and financially, 2018 brings new hope of a better financial future. Despite the debate over the new Federal government tax plan, everyone is hoping to come out ahead financially at the end of the year. Some people consult with their financial planner, which is always a great idea, but other people have a relatively simple financial situation. Either way, there are some things you can do that will take very little of your time and will potentially save you hundreds or even thousands of dollars by the end of the year – if you don’t put them off until later.

It is said that time is money, and keeping that in mind before the New Year starts gaining momentum can only benefit you later. Use the pause in the holiday season and make time to do some simple things that will add up to dollars saved over the next 12 months.

1. If you overworked your credit cards, plan on paying them down as quickly as possible. Even with a low APR the monthly interest will eat away at any long term savings.

2. Check the status of your emergency fund. If you don’t have one, start building one. Keep it in a separate bank account instead of mingling it with other accounts. Make it a budget item instead of seeing if anything is left over after all the bills are paid.

3. If you are employed by a company that offers a 401(k) plan, check to see how much you are contributing and whether it is practical to increase the amount of your contribution. The more you save now, the more you will have for retirement. Many companies have announced they will be sharing the benefits of the reduced corporate tax rates with employees in the form of a raise. Whatever that percentage is, increase your 401(k) contribution by an equal percentage.

4. Take time to check the type of insurance you have and its overall value to your financial picture. You may be able to change your insurance policies to get a cheaper rate. But keep in mind that going cheap now may cost you more should you need to use it (car insurance, for example).

5. See if you can increase the number of deductions you are currently claiming on your W4. Some people like to claim a lower number to get a bigger refund at the end of the tax year. But with the new tax bill passed, you may be able to bump up the number of deductions and get more now while still getting a hefty refund next year.

6. Ask whether you have a debt reduction plan in place. Many articles focus on saving money and investments, but those gains can be offset if your debt levels are too high or the amount you are paying in interest has you actually ending up in more debt that you began with. Combine a savings and investment strategy with a debt reduction plan to maximize the benefit of your financial plan.

7. Ask yourself whether a second source of income in possible. The advantage to having more than one source of income is that if the first one hits a snag you have another to fall back on. This is not the same as working two jobs to make ends meet. It can be a part time job you may prefer over your main source of income. You will be able to save more, and if hard times hit you can reduce the impact on your emergency fund.

8. Examine your general health. We are not talking about being a gym rat here (no offense to those who already are) but checking to see if you have any health problems that need to be tended to. Lost days from work because of illness are one thing, but being healthy will reduce your overall stress levels and make you more productive at work and home.

9. Reduce the amount you spend on monthly utility bills. This may involve spending a little up front to save more throughout the year. A programmable thermostat can be more energy efficient that a standard one, and will save you money in the long run. The New Year also introduces some of the coldest weather of the year, so shoring up any leaks that have heat leaving your house will result in an immediate savings.

10. Plan for spring cleaning. Why? Because you likely have several pounds of unwanted or unused items sitting around that you can convert into quick cash by selling. Create a plan now so you won’t forget about it when the weather is warmer and you really ought to be outside enjoying it.

You may be able to implement some or all of these simple tasks. The more you do before the New Year hits high gear, the more likely it is you will save more as the year goes on. Some ways, such as starting an emergency fund, may require financial discipline, but you will be better off this time next year. Your financial focus on New Year’s Day should be on New Year’s Eve!

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