New Year, a Financially Happier You


I love celebrating the New Year. Like many, I see the passing from one year to the next as an opportunity to make changes to my life that will make the New Year a happier one for me. Here are 5 tips to making a financially happier you. 

1.  Pay off your credit card debt

It's really stressful not to mention costly to carry credit card debt month to month. Financially the quickest and most cost effective way to pay off your debt is to pay off your credit cards in order of highest interest rate card to lowest interest rate card. You make the minimum payments on the cards with the lower interest rates while paying as much as you can on the card with the highest interest rate. Once the card with the highest interest rate is paid off, then you move to the next highest rate card. Often the card with the highest interest rate has the highest balance so it can take quite a while to pay it off. Because of that many people feel more satisfaction paying off the cards in order of smallest balance to largest balance. Choose the method that will give you the most satisfaction and help you stick to your get out of debt plan.

2. Increase your ready cash

A recent study done in England shows that people have more satisfaction having a large balance in their checking or savings account than having a large net worth from their investment accounts. It's simply due to the fact that having cash readily available makes people feel more secure knowing they have the funds to handle unexpected expenses. Most financial planners will recommend that you have 3 to 6 months of expenses saved in an emergency fund. For the past few years I've been recommending that my clients also have a replacements fund available in their checking or savings accounts to handle car repairs, home repairs, etc. Even having just $1,000 set aside for these expenses goes a long way in giving you peace of mind. 

 3.  Make sure your money is working for you

Go figure, studies also show that people are happier when their money is being spent on things they like to do or on things that are important to them. Start with writing down the things you like to do in your free time; athletic activities, hobbies, who you like to spend time with, where you like to go, etc. Then write out the things that are important to you; ensuring your family's financial security, securing your retirement, charitable donations, giving back to the community, etc. Do you have enough money allocated in your spending plan to ensure you can do these things? The end of the year is a great time to review your spending plan to make sure your money is going towards the things that are important to you and to the things you derive enjoyment from.

4.  Go for your Dream Job

Many of us end up settling for a job we don't love or derive personal satisfaction from. When you think about the fact that most of our waking time is spent at work, no one should settle. So if you're not working your ideal job, what will it take to get there? If you're not sure, ask someone who is already doing the job, your LinkedIn connections can be a great resource for this. It might require obtaining some additional experience through a different job first or going back to school for a degree or certification. Reaching out to someone to find how to get your ideal job is a great first step.

5. Spend time on the things that matter

When making major life decisions such as buying a home or taking a new job, we often just look at the financial implications and forget to consider the time factor. Buying a larger home or a home that needs updating will take more of your time for simple home maintenance and for arranging and or doing the renovations. Also consider how the location of a new home or new job will affect your commute. Adding another 30 minutes each way to your commute is another 5 hours a week you aren't spending time doing the things you want to do.

Wishing you a happy and successful 2017.