The start of a new year is a great time for a fresh start when it comes to your finances. Now is the time to make the right resolutions and then create a plan to stick with them! FOX 46 is getting results for you by partnering with Nicole Pilo, a financial planner at Consolidated Planning. Nicole says it’s as easy as 1, 2, 3 meaning:
1. Save more
2. Pay off debt (mostly high interest debt)
3. Spend less
Easy, right? The devil is of course in the details. That’s why Nicole says in order to succeed in saving more in 2019, the secret lies in automation. As in automating your saving. Ask your HR representative how you can designate a certain amount or percentage from each paycheck to go to a savings account. That way, you never see the cash and you’re less likely to spend it! Saving is a lot harder after you pay your bills and treat yourself to dining out and other things. A word of caution: make sure the savings account is not connected to your main checking account. That way, you don’t also use it as an overdraft buffer (which drains savings quickly).
Once you’ve paid yourself in savings, turn your attention to paying off debt. Nicole advises you target the high interest credit and consumer debt. There are two ways to do so: pay off the smallest balances (so you get some financial wins under your belt quickly) or pay off the debt with the highest interest rate (so you avoid paying more in interest). Paying this debt off is like getting a raise – more money in your budget! But before you celebrate with a spending spree, think again: take the money you were using to pay off the first debt and put it toward the next debt. The more you pay at a time, the faster you’ll pay off all of your debt.
Finally, spend less. That may be the toughest one of all and we sympathize. However, there are some easy ways to do so, according to Nicole. First, track your spending – most people don’t have a realistic idea of how much they actually spend a month. Second, have two checking accounts: one for fixed monthly expenses such as rent/mortgage, insurance, childcare, etc and one for spending money. That way, your bills get paid no matter what. Second, pull a designated amount of cash and spend ONLY that on non essentials. Cash hurts to spend and once it’s gone, it’s gone.
See? Put these 3 steps into action and you’ll be getting financial results in 2019! Happy New Year!