7 Easy Ways to Reach your Financial Goals in 2016

Do you need a foolproof plan to get your butt into financial gear this year??

First step, what are your financial goals for 2016? Take a minute and write down the first 3 that come to your mind.

If you are like many others, you have likely listed one of the following:

• Save more
• Spend less
• Stick to my budget
• Pay down my debt
• Make more money
• Get organized

Second, be more specific. Do you want to save $100 more each month? Why? Is this for retirement, college savings, or just that vacation you want to take? All of the above?
Go through your list and make each one more specific, that way you can celebrate more and be comfortable that you are on your way to reaching your goal.

Now that you have your specific goal, what can you do to make it EASY to work towards and HARD to fall to the wayside?

Here are my 7 tips on making things EASY (or at least easier )on your financial mindset this year. Try them and let me know how they work!

1. Dedicate a separate checking account just for your expenses. Figure out what your fixed expenses are (rent, utilities, cell phone, internet etc.) and then have them automatically paid from this account. Divvy up your direct deposit, or paychecks so that the appropriate amount is going into your expense checking account and let it be. This way you know everything is getting paid and paid on time. And it helps with budgeting, since you don't have to constantly check in on yourself to make sure you didn't spend your rent money.
   
2. Set up a savings account for each goal. You might already have a retirement account or college savings set up. But what about for your other savings goals? Set up a separate account for each goal. This way you can track your progress and are less likely to pull out cash on an impulse. This means one for the emergency fund, one for the vacation fund, one for the house improvement fund etc. Even if you only start with tiny contributions to each, you have started.
3. Set up an automatic debt payment tied to every time you get paid. This should come out of your expense account. Whether you get paid twice a month or once a week, set this payment for the day after. This way, the payment is out of your face before you have a chance to spend it! 
4. Set up an automatic savings contribution tied to every time you get paid.  Same deal as the debt payment, set this up for the day after you get paid and bam! Before you know it you are on your way! This should also come out of your expense account (you are paying yourself). This takes 5 minutes or less. 
5. Transition to online statements. You not only reduce clutter in your house, but then you can find what you need quickly, oh, and help save the planet.
6. Switch to the envelope method for problem spending areas. Is one of your goals to spend less on take out? Or maybe its shoes? Give yourself a monthly cash allowance for these, and literally put it in an envelope. When its gone its gone.
7. Ask for a raise (if you deserve it)- its surprising how many people just go with the regular 1-2% annual raise and never think to ask for more! You don't know if you don't try! Don't deserve it yet? Enhance your skills so that you will. Whether its taking a free (or employer paid) class online or just dedicating a couple hours a week honing a skill/ hobby you enjoy. Just make sure that when you do get some more cash, you divvy a good chunk of it up to your monthly savings or debt reduction plan!

Do you have more? Let me know!

Two Checking Accounts?

If both you and your signot (significant other) are taking dips out of the same account, how do you know if you're staying within your budget? What if he spends the money that was earmarked for the car payment??!!

We all know it's easy to become stressed about money and figuring out the best way to manage it can be a challenge. What's even harder? When you are co-mingling your finances with someone else. Chances are that one of you spends a bit more than the other- whether its on clothes, or on groceries; but what if the roles reverse one day, does the other person know the limit?

My last post talked about those of us that have a difficult time with budgets and being consistent about tracking our cash. Once you figure out your variable expenses (anything NOT fixed like food, going out, clothes, etc.) you can either take that money out in cash OR just open a second checking account!

When you open a new account, number one, you won't have to worry about losing your cash and two, you can see your spending patterns without having to collect receipts.  With both of these methods, you will know when your spending has to stop (when the money is gone) and you won't have to worry about dipping into money that is intended for a fixed expense, like say your electricity.. or worse, your mortgage.

So figure out how much variable cash you have after your bills are paid, work it out so that money goes directly to your new checking account* (set up direct-deposit in equal amounts from each paycheck). Everything else goes into your primary account and will cover your fixed bills.

Make sure that the fixed bills are being paid when there is cash in that account however, so call any lenders, retailers, or organizations that you are paying and change dates as necessary.

*Make sure you know the details of the checking account you are opening. An increasing banks and even some credit unions are instituting fees to maintain a checking account; some will waive the fees if you have a certain amount being directly deposited- so read the fine print!

Cash Flow is Key

So you have a budget, or at least you know that you are making at least a little more than you are spending. So why does it seem like you run out of money every month?

Cash Flow.

Do both you and your signot(significant other) use your primary account for flexible spending? Maybe you are in charge of the finances so you know not to do the big grocery trip right before you get paid, but do they know that?

Many of our bills tend to be grouped into one end of the month or the other. The key is to spread out our bill payments so that we can maintain a positive cash flow.

Today's tip:

• Jot down all your bills (mortgage, car payment, electric/ gas, phone, cable, internet, subscriptions, credit card payments, insurance, and monthly savings contributions). 
• Divide into two categories so that each side is as equal as possible. 
• For example: 
• mortgage/ rent= $1500
• car payment ($400)+electric/ gas ($200)+phone ($100)+cable ($100)+Internet ($50)+ subscriptions ($100)+credit card ($200)+insurance ($150)+savings($200)= $1500
• Next, look up all the due dates. Since most of us pay our mortgage or rent at the beginning of the month that will be one major expense allocated to the first half of the month. Next, take the bills that are  due in the first half, and see if you can change their due dates to the second half. Sometimes you can do this right in your online account, otherwise you will have to email or call customer support. There should be no reason why you cannot switch the payment date; just keep in mind, you may end up paying twice in one month when you make the switch.
• Finally, set up as many of your bills as possible with autopay; this way you won't forget when they are due, and save yourself from late fees as well!

If you are worried that you will not be able to keep track of how much "extra" money you have left to spend on food and entertainment- check out this post for those of us who don't do well with "formal" budgets.