A New Year - A New Plan
2015. A fresh start. Maybe time for a change. Are you making any financial changes in your life this year? After speaking with friends and family over the holiday break, here are what some people we know are doing this year.
The 52 Week Challenge – I have mixed feelings about this “plan”. It’s designed so that each week of the year, you save the corresponding amount of $$. So week 1, you save $1, week 24 -$24, etc for a total annual savings of $1,378. Why don’t I like this plan? Because after week 1, you are celebrating that you saved $1. One dollar. You can find that amount between your couch cushions – that’s not really an accomplishment. To counter that, we’ve seen people suggest that you invert the plan and save $52 in week one, but then by the time you get to the end of the year, again, you’re reducing your savings to $1/week.
Our suggestion: talk to us about setting up a weekly plan that automatically withdraws $25 or $30 each and every week for the year and it’ll even earn interest (instead of sitting in a piggy bank at home). $25 a week puts you at $1,300 (before interest) and $30 week comes in at $1,560. What would you like to do with an extra $1,500 a year?
Increasing Automatic Savings – A friend of ours is getting a raise this year and he intends to increase the amount he saves on a monthly basis. Once again, it’s automatic and it’s easy.
Tracking Net Worth – The best way to figure out if you’re headed in the right direction is to track it. Add up all your assets – your savings accounts, investments, etc and subtract your liabilities – student debts, credit cards, mortgage, etc. You may currently have a negative number and THAT’S OKAY. The key is that it is a smaller number (if negative) or a bigger number (if positive) the next year. So tally it all up and save it in an excel spreadsheet and compare it to this date next year to ensure you’re heading in the right financial direction.
Creating and Printing Out A Goal Sheet – Most of us make New Year’s Resolutions, but by February we forget why, we lose track, and we stop. Last year I typed out a list of 50 Goals that I want to achieve in the next decade or two of my life. Early in January, I printed out photos of the top 10 I want to complete this year and put it by my bed so every day I wake up, I will continually be reminded of why I am getting up that morning – to achieve those goals!