Making a commitment to improving your finances in the new year is a smart move. Creating financial goals and sticking to them requires not only a roadmap of where you would like to see yourself financially but also extreme discipline. Making goals to improve your finances is one thing, but actually resolving to make them happen is equally important. Trying to improve your financial situation is confusing and overwhelming if you are unsure of where to begin, so let’s take a look at three ways that you can start today to get on track to healthy finances.
Create an Emergency Fund
When you have high living expenses, it is challenging to even think about putting money away for a rainy day. However, if you are suddenly hit with a large medical bill, an emergency home improvement cost, or a sudden job loss, you can rest much easier knowing that you have a nest egg set aside strictly for emergencies. Experts recommend having three to eight months of living expenses set up in an account just for emergencies, and more if you can manage to. Don’t let an emergency situation hinder your goal for improved finances in the new year; simply open an account today, add money to it monthly, and begin your emergency fund.
Learn Investment Strategies
If you are looking at adding an extra stream of income to help improve your finances, take some to research investment strategies. Hiring a mentor or investment coach can help you avoid mistakes and get you on the fast track to learning about the stock market. You may have heard about penny stocks and day trading, but another form of trading that can reap financial rewards is swing trading. This is a type of short-term trading of stocks, usually lasting only two to six days. Swing trading is not as risky as other investment strategies, but do be aware that any type of investment trading has inherent risks. It is important to do your research and speak to an investment consultant before you begin.
Eliminate Credit Card Debt
Credit card use and debt are at a staggeringly high number and credit card debt can keep you from ever achieving your goal of financial freedom. According to the Federal Reserve, credit card debt totaled nearly four trillion dollars in October of 2018, which is a rise of almost eight percent from September 2018. As of January 2019, the national average APR (Annual Percentage Rate) was a whopping 17.41 percent! When you add huge interest rates to your existing debt, paying off those cards is quite challenging. Some strategists suggest paying off your highest interest rate card first, and work as diligently as possible on paying more than the minimum on low-interest rate cards next.
You can improve your financial situation in the new year by following these tips and strategies, being diligent about adding to your emergency fund, paying off your credit cards, and consulting with an investment consultant, so you can have healthy finances now and in the future.