Focus on Your Financial Health in 2018 with These 3 Tips

Focus on Your Financial Health in 2018 with These 3 Tips
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Living paycheck to paycheck is the new way of life for U.S. workers,” Mike Erwin, a spokesman for CareerBuilder explained to CBS Money Watch. “It’s not just one salary range. It’s pretty much across the board, and it’s trending in the wrong direction.” A recent CareerBuilder survey has shown that as many as 8 out of 10 Americans are living paycheck to paycheck, just barely earning enough to make ends meet. This lifestyle trend is costly, forcing many families to accumulate debt and struggle to manage unexpected costs, like vehicle repairs or a broken down water heater. And even those who make six-figure salaries are not immune to this disturbing cycle; the high cost of living in some areas of the country (coupled with our culture of consumerism) can leave even the relatively affluent just as cash-poor as lower income families. All signs point to the number of Americans living “on the financial edge” continuing to grow, CBS indicated in its 2017 report. The American debt burden is reaching crisis-level proportions, with 1 in every 50 households carrying more than $20,000 in revolving credit card debt alone, according to Market Watch. But that credit card debt is only the tip of the iceberg, with mortgages, student loan debt, car loans, and miscellaneous personal loans accounting for an even larger percentage of the average American’s total debt.

The moral of the story? Most Americans could stand to focus on improving their financial health as their new year’s resolution. Take a look at our top tips for feeling better financially in 2018.

  1. Stop smoking. If you’re a smoker, start the new year with a double whammy - improve both your financial and physical health by kicking that expensive habit once and for all. According to SmokeFree.org, smokers can easily spend $177 a week, or over $9,200 a year, on cigarettes. While the most cost-effective method may be to quit cold turkey, that’s not a realistic approach for most people, so don’t feel bad if you have to invest some funds into nicotine patches or electronic cigarettes like Juul to wean yourself from the drug. If you’re not a smoker, you don’t have a free pass on this bullet point. All of us have our vices - something that’s neither good for us nor good for our wallets. It could be something as simple as always adding that extra pint of expensive ice cream in the frozen foods aisle or drinking too many soft drinks. Whatever your vice may be, now is the time to reconsider its impact on your overall health.
  2. Focus on paying off debt. While it’s important to have some kind of emergency savings, it doesn’t make any sense to stockpile cash if you owe money, especially if you are paying interest on a credit card or other forms of debt. You don’t really have a $5,000 savings account if you have $10,000 in outstanding debt. Make paying down debt as quickly as possible your number one priority when improving your overall financial health.If you have a good credit score, you can probably get a balance transfer credit card with a 0 percent introductory interest rate, which can save you hundreds or even thousands if you can pay off the balances within the promotional period. Your money can go a lot further if you eliminate the cost of interest, so this can be one of the most effective ways to pay down debt fast.
  3. Grow your money. Saving your money is a smart (and safe) bet, so you shouldn’t skip over saving entirely, but it is important to remember that the most common interest rate on a savings account is a measly 0.01 percent. While having a certain amount of money in the account or linking multiple accounts can sometimes raise the amount of money banks will pay you to actively save, the reality is that growing your money requires a smart investment strategy beyond simple saving. If you’re not the type to keep up on the latest hedge fund news and stock market trends, it may be worthwhile to consult with a professional about what moves you can make to create or expand your portfolio. If you’re completely brand-new to investing, understand that the real name of the game is long-term strategizing, not quick trades and fast money. Spend some time really reflecting on your overall financial future goals so you can tailor a strategy that puts your money to work for you.

If you’re ready to take control of your finances this year, these tips are the best place to start - regain control of your spending, exert maximum effort into getting out of debt, and start planning right now for your financial future - these are the three elements most critical to your success.

What financial goals and resolutions are you making for 2018?

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