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The new year is upon us. Which means that it is time to consider how you want to manage your finances.  Hopefully, you had some things go well financially and may have experienced some setbacks also.  Hey, it happens.


The good news is that you can learn from all your financial experiences.  The three key things to consider to improve your 2017 finances are spending, savings, and income.


Spending


Spending is by far one of the things that get a lot of people in trouble.  Most people do not even realize how much they spend on a monthly or yearly basis.  It is easy to spend more than you earn if you do not track it.  Using credit cards and debit cards can sometimes mask spending levels.  The reason people overspend on cards is that they spend quick and reconcile transactions slowly.  


Few people check their credit or debit card transactions on a daily or monthly basis.  A lot of individuals will wait until the end of the month to review purchases.  So by the time you look at your spending you see a huge total.   
The way to fix your spending is, first of all, to know what you spend on.  Most banks or financial institutions will provide a year-end summary of spending.  Sometimes you will even have your spending broken down into categories for more insight.  Of course, you have essentials like lodging, transportation, and required monthly expenditures.  But a close look will reveal what your next biggest items are.  


So let's say food or clothing are your highest costs after the things you must pay each month.  You have to ask yourself is there a need to cut back.  Spending can be one of the biggest impediments to staying on track financially.  Using cash helps to check spending.  The rationale behind cash is that it is hard to spend because it is hard to let go.  You tend to think more about how much things cost when paying cash.


Saving


Everyone wants to save money.  It's one of those things that is easier said than done.  One of the issues that people face when trying to save is the fact that life happens.  So you have expenses and unexpected expenses that are out there to derail you.


Still, there are plenty of options when it comes to saving.  One thing you can do is to revisit the first suggestion which is spending.  By adjusting your spending or finding cheaper alternatives you begin to have money to save. So let's say you get a latte every day before work, which could cost about $5 a day.  By switching to a cheaper option of coffee which could cost about $2 a day, you have a $3 per day savings.


Knowing you are saving that amount is only half the battle.  You have to find ways to separate the funds saved so that you do not spend them.  One of the best ways to do this is to make it automatic.  Set a savings goal for a particular timeframe, say each week or month and put the money away.  You can use a bank account, a piggy bank, a safe or whatever means you like to safeguard the funds.  


One of the cool things that I decided to do for next year is to save all my change.  I bought a digital coin counting bank to help me save.  The cool thing about this is that my bank offers free coin counting.  So once the bank is full, I'll take it to my bank and make a deposit.  One option for you if you want a coin bank like I am referring to is the Digital Money Jar by Sharper Image.


Income


The last thing to consider to make your 2017 finances great is income.  None of your financial objectives get met without income to get the ball rolling.  Figure out if there is a way to increase your income for the year.  Maybe you are due for a raise. Or you are a freelancer who can raise your rates. Maybe you could put in a modest amount of overtime or find a side hustle.  There are lots of ways to increase your income; you just have to find one that will work for you.


As an added benefit to you, I have included a link below to a previous post I wrote related to finances for the new year.


New Year, New Finances


 


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