Shaping up your finances in 2017 may seem like a big goal, perhaps even too daunting. But if you take one small step at a time, these small steps will add up. Here are suggestions.
* Shift out of automatic. Have you established automatic bill pay at your bank or service provider, or automatic charges to your credit card?
Small step: Look for payments for goods or services you no longer use, such as recurring monthly subscriptions, and cancel them.
Big goal: Reduce total expenses and increase savings.
* Take the urgency out of emergency. Sure, you know that having an account with enough funds specifically earmarked for emergencies is a good idea. But the amount you need to save seems overwhelming. The good news is you don’t have to immediately fund six months of living expenses.
Small step: Set up a separate account with automatic deposits of $5 or $10 per paycheck, perhaps with funds you’ve redirected from those unused recurring monthly subscriptions.
Big goal: An emergency fund with enough cash to cover six months of expenses.
* Give yourself credit. Maybe you intend to pay off your credit card debt. But do you have a plan? Knowing where you stand is the first step in getting to where you want to be.
Small step: Make a list of your cards, the balances, the minimum payments, and the interest rates.
Big goal: Eliminate finance charges by being able to pay off your balance each month.
* Retire your excuses. Does your employer offer a retirement plan? If so, you may be leaving money on the table.
Small step: Find out what amount is on offer as “matching” funds. That’s money your employer will add to your account when you make contributions.
Big goal: Maximize your retirement contributions.
Small steps can lead to big improvements in your financial well-being.