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If you have big financial resolutions for 2019, you may feel like you need to change everything right now.
But instead of making drastic moves, try these smaller changes over time. You’ll be less likely to burn out or get frustrated when you can celebrate quick wins and achievements at a manageable pace.
Here’s your month-by-month guide for making a significant impact on your money.
January: Decide What’s Important
We all want to hit the ground running in the new year, but are the holidays exhausting or was that just us? It’s OK to take some time to recover. In January, think about your big-picture goals and how your finances can impact them.
Do you want to pay off your student loans, change jobs, travel more? Write down three parts of your financial life that you would like to change before January 2020. Those will inform the rest of your money moves this year.
February: Make a Budget
You can’t make progress if you don’t know where your money is going each month. Compile a list of your debts and calculate your income. Then, put together a budget that includes your monthly spending.
To make sure you’re being honest, look at your statements from the last few months — including debit and credit cards. Don’t forget to factor in expenses that don’t happen every month, like your annual Amazon Prime membership.
March: Stop Spending on Things You Don’t Want
Seeing your budget laid out in front of you probably makes you want to reconsider some expenses. In March, reconcile your goals from January with your budget from February, asking yourself what in the budget can be trimmed to free up money for more important things.
April: Build an Emergency Fund
After cancelling subscriptions and cutting back on your bar tab in March, you likely have some extra cash. Use that to help build up your emergency fund. Initially, aim to save $1,000 and then continue until you reach your right benchmark. This guide can help you calculate it.
Put this money where you’ll be able to access it relatively quickly, but not without intentional effort. Online savings accounts are great for this.
May: Check Your Credit
Most of us will need to borrow money at some point (like if you want to buy a house or go to grad school). Your credit score — which aims to measure how likely you are to repay your debts — has a big impact on whether you can borrow and how much interest you’ll be charged.
In May, check your credit score and report (which provides more in-depth information). If you spot any mistakes, begin the process of correcting them. If you have no credit history or your score is low, start working to build it up by getting your first credit card, paying off debt and making all payments on time.
June: Take the No-Spend Challenge
Getting up close with your credit report revealed the debts you carry. Take this month to jumpstart your debt payoff (or, if you’re lucky enough to be debt-free, to further fortify your emergency fund).
First, define what no spending means to you: Some people opt not to buy anything other than groceries and gas, while others allow a bit more wiggle room. However you define it, your goal is to drastically cut back on discretionary spending. Luckily, free fun — from outdoor concert series to swimming holes — abounds during the summer, so get a little creative.
July: Address Your Debt
Now that you’ve seen the possibilities for saving in your monthly budget, it’s time to make a long-term debt payoff plan. Whether you choose the debt avalanche (paying off debt in order of highest to lowest interest) or snowball (paying off debt in order of smallest to largest balance) method, get started.
August: Make More Money
There are two ways to get ahead financially: reduce expenses and increase income. You’ve gone over your expenses thoroughly, so now it’s time to see about making more money. If you’ve been at the same job for a while, consider asking for a raise. If you can’t get anything else out of your current job, consider picking up a side gig or selling unwanted items.
September: Think About Retirement
You’re likely decades away from retirement, but this is the time to save. Compounding interest works magic, so start ASAP. If your employer offers a 401(k) match program, take advantage of what is essentially free money. And if you don’t have a 401(k) through your employer, look into opening an IRA to save for your future self.
October: Consider Investing
You’re already investing in your retirement account — way to go! But to make your money work harder, start thinking about investing in other ways. The sooner you get comfortable with it, the more time your money will have to grow and take you to your financial goals.
November: Avoid Debt
Before the holiday season’s spirits get the best of your spending, make a budget for the holiday season that’s realistic, but tough. Then, stick to the plan, rather than putting holiday purchases on a credit card you can’t pay off.
December: Automate Your Savings
As you become more tempted to blow your budget, automate your savings — because you can’t spend money that’s already left your account. Revisit this automatic transfer periodically to increase how much you’re putting away. Don’t forget to increase your retirement contributions, too.