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My 8 Financial Resolutions to Consider for 2018
#1 - Don't try to keep up with the proverbial Jones' - The Jones' have single handedly killed more financial legacies than any other family on earth, lol. It's extremely hard to do when every piece of advertisement we see pits us against one another. However, if you can learn to stay focused on your financial goals and NOT worry about what everyone else is doing you'll be fine.
#2 - Invest/Save Before You See It - Try automating your investments/savings. It's amazing how far we can make our last few dollars stretch. Well, guess what? We can make most of a pay check (less a set amount that goes to a savings or investment account automatically) stretch just the same. You'll actually learn to adjust rather quickly to the new take home pay amount.
I once had my pay check being garnished because of student loan debt. I was pissed when I found out they were going to be taking my money, as if I didn't know I owed them, but within 2 weeks the adjustment was made and we didn't really miss it. The same is true for you, have money from your pay check directly deposited into an investment or savings vehicle automatically then adjust your budget to live off what's left. It's harder make the decision to do it than it is to actually do it. You're gonna have to trust me on this one.
#3 - Get To Building Your Emergency Fund - I know you hear the financial minds say it all the time, and you agree that you need one but putting money somewhere without touching it is just easier said than done. One thing you can do is set up a savings account in a bank that's very inconvenient to get to. Maybe one that's a couple counties over and make sure you DON'T elect to receive a debit card or checks to that account. Doing this will force you to think twice about accessing that money to make impulse purchases. Chances are by the time you go through what's needed to access the funds in the remote account the impulse would have subsided.
#4 - Max Out Your Company's Match - It's FREE MONEY! I don't know how else to say it. Just like with #2 Invest/Save before you see it, whatever percentage your company is matching you, figure out a way to maximize your contribution to meet that amount. Sometimes it's a matter of scaling back just a little but it's definitely worth it. Again, it's FREE MONEY.
#5 - Get Your Credit Tight - We've all heard it said that cash is king. While that might be a true statement, credit has ruled this kingdom for a long, long time. Most working class people are just now beginning to understand that. What is credit? Basically it's your reputation in the market place. As the Bible says "a good name is more desirable than great riches." Let's face it, having bad credit is something that we literally CANNOT afford. The interest on borrowed money with poor credit vs good credit could mean the difference between living check to check and having extra money left to invest or build an emergency fund.
"A good name is to be more desired than great wealth,Favor is better than silver and gold. " Prov. 22:1
#6 - Get Your Taxes Under Control - Most working Americans don't realize that taxes are their largest expense and even fewer understand the control that they have over their income tax. Yep, you heard that right, of all the many fixed taxes that we are required to pay, there is one that we actually have control over and that's our income tax. We dictate to our employer how much money to withhold from our paychecks for taxes.
Depending how long you been on your job, you might not even remember completing form W4, the Federal Income Tax Withholding certificate. But you did and you told your employer exactly how much to withhold from your pay check for taxes. According to the IRS upward of 80% of working Americans completed the form incorrectly and are having TOO much money withheld from their pay. Just correcting a simple mistake could transform your finances. Last year I help a married couple increase their take home pay by $1000 per month. The wife was overpaying $700 per month, hadn't revisited her W4 since she'd been on her job even though she'd since gotten married, had 2 kids and started a business. The husband was overpay by $300 per month, so that $1,000 monthly increase transformed their finances dramatically. Getting control of your taxes can go a long way towards righting your financial ship.
#7 - Read, Listen and Hang - This is probably the easiest of them all, once you get through the first couple of days. You are who you are because of 3 things primarily, the books you read, places you go and the people you associate with. It's time to increase your financial I.Q. Therefore you'll absolutely have to start reading books, magazines and blogs on the subjects of money, wealth, credit, capitalism, taxes etc. You'll need to start listening to podcast and other content regularly on the subject of money.
Don't be afraid to redraw your circle either. Too many times we feel guilty about leaving old associations behind. Friends, family members even significant others that aren't focused on the same things you are at this stage in their lives may have to get left behind. It sounds harsh but how long are you willing to stunt your own growth for those that aren't willing to grow at all. Sometimes it's a matter of praying for them and moving on. An unforeseen benefit of moving on in life is the inspiration that it causes others to feel as you prepare to move forward without them. So in a sense, you stunting your own growth may very well be pacifying the complacency of those around you. Don't be afraid to be great. In the words of one of my favorite entrepreneurs and vloggers Na'Kesh D. Smith, "the sun don't give a f*ck who it blinds when it shines!" You cannot afford to dim your light for fear of intimidating someone that can't handle your greatness.
#8 - Start Your First Business - It's said that 9 out of 10 business fail. i don't know how true that is but I was so determined to become a successful entrepreneur that I was prepared to start at least 10 businesses. That's why I say make an effort to start your first business in 2018. As much as I'd like for this endeavor to be wildly successful, chances are you're going to have a rough go at this thing we call entrepreneurship. However, now's as good a time as any to start your first business.
In today's economy and with today's technology there are tons of businesses that you can start for very little out of pocket costs. Take your bumps and bruises early and often but more importantly, learn the lessons and grow. You may now be successful the first go around but you'll learn valuable lessons that will make the second time around more tolerably.
Then there's the uncertainty of the job market in this economy, yet another reason to give entrepreneurship a shot. Take the recent Newsweek Article stating the proposed thousands of lay-offs from one of the big Telecom companies. Sobering news for those employees this time of year. Even if your company is doing well, in my opinion the very best time to prepare for storms is when the sky is clear and the sun is shining bright.
H Cortez aka Financial Health Mentor to the Working Class
Dave Ramsay Course