The Wall Street Journal recently shared there are two times when you are most likely to follow through with your money goals (or any goal for that matter): the new year, and your birthday.
So, if you want to become richer in 2020, now is the best time to set up the money goals necessary to achieve success.
While the specifics of your goals should be tied to your individual situation, here are a few ideas to get you started.
When you start brainstorming your financial goals for the year, make sure to keep an eye on the big picture. It’s easy to get caught up with trivial saving and earning goals – but those won’t make you rich.
Instead, focus on the high-level items below and you’ll be well on your way to ending this year with far more wealth than you have now.
1. Start tracking your finances and credit score
Do you know your total net worth, how much cash you have in the bank, and how much debt is on each of your credit cards? Knowing these details is an essential first step to building wealth. And it’s actually very easy to do.
I use the free tool, Personal Capital, to track all of my finances in one place – and I LOVE it! After connecting my credit cards, banks, investment accounts, and Zillow property values, everything updates automatically. All I need to do is log into one account to see my net worth over time, all of my debt, and whether I’m making more money than I spend every month (which is very important for building wealth).
Additionally, keeping a high credit score can literally save you thousands of dollars a year – as it’s a key factor used to determine interest rates for your mortgage, car loans, etc.. And it’s rumored that some employers will even look at credit scores when deciding whether or not to hire someone.
While there are many services online that offer to track your score if you pay them – you should never need to pay for your credit score. Many credit cards will now provide you with a free copy of your credit report every quarter. Alternatively, another one of my favorite tools, Credit Karma, will give you free access to your credit report – along with providing free tax preparation software.
2. Do an audit of your ongoing expenses (This could save you thousands!)
Many people end up paying recurring fees for unnecessary and unused services. Some examples of costs you should review to start off your new year (and potentially eliminate) include:
Stop paying storage fees for junk you don’t use
If you pay to store a boat, RV, or storage unit full of old furniture, ask yourself if it’s really worth the cost. If you spend $1,000 to store an RV you take out for one week a year, it may be worth it to rent instead. And if you’ve had a storage unit for over a year, and you aren’t in the process of moving, it’s time to get rid of it.
Stop paying high insurance premiums “just in case”
Every insurance agent on earth will try to oversell you with “just in case”. Insurance should be to protect you from costs you cannot afford – buying extra only benefits your agent.
My initial homeowners insurance quote charged me $50 to protect against lawsuits due to animal attacks on my property (I don’t own a pet and I live in the city) and $75 for identity theft protection (which my banks and credit card providers already cover for free).
Make sure you’re only paying for insurance you need – and you could cut down your annual costs by a few grand.
Find and stop hidden subscription services
So many people still pay $10/month for a Hulu or Netflix free trial they forgot to cancel 2 years ago.
You should never pay for a subscription service you don’t use (or forgot about). So start tracking those recurring expenses and turning them off!
Check to see if your credit card company or bank tracks these recurring expenses for you. If not (or if you want extra protection) consider using the free tool Trim.
The Trim App tracks your financial accounts and sends you texts if it notices a recurring payment, annual fee, or surprise transactions. Trim can save you on all kinds of bills.
Negotiate lower bills for your utilities and other recurring expenses
The last tip for lowering your monthly bills with your financial audit is to ensure you’re paying the lowest price necessary for your necessary recurring expenses.
