January ushers in a year of optimism and hope for me each year.  In Chinese culture, the year is designated by an animal that gives the year a theme of sorts.  I also like thinking of the year before me as a great block of time to be determined by a theme.  For example, last year I decided my plan would be to plan less and experience more.  I love having a plan, but I realized my borderline obsessive need to have a plan all of the time was hindering me from fully enjoying my own life.  This theme worked wonders for my life last year!  I know that the year is quickly slipping away as spring is coming, but it’s not too late to make this year count.

While I fully respect that every individual on this planet can develop a theme that seems like a perfect fit, I began wondering this year if there are things we can all focus on individually that will have lasting results.  In thinking about this coming year for all of my fellow Americans, I couldn’t help but wonder what we can all do to become better off financially.  Now I’m not talking about getting rich quick, abolishing taxes, winning the lottery, or any other drastic measure.  I am talking about taking what we already have and making the most out of our own situation.

In contemplating this idea, I had the chance to talk to a seasoned bankruptcy attorney, Justin Burton of Rulon T. Burton & Associates.  I realized this was the perfect chance to get some solid tips from an expert on the consequences of poor money management.  What can every American adult do this year to improve their financial situation?  Before any more time passes this year, I want to offer the wisdom I gained from asking an expert:

 1.  Get serious about having a budget and follow it.  Track ALL of your income and expenses on a monthly basis.  If you are married, discuss ALL of your finances together.Couple planning finances

 2.  Identify any wasteful spending and cut it out.  Wasteful spending can account for any expense that isn’t really necessary, purchases made on impulse, paying more than necessary for needed items, buying an excessive number of similar items, etc.  You may also want to consider things like eating out too frequently, using too much gasoline for car trips that could be combined, and swiping your credit card without paying attention to the cost.  Necessary spending should be designated by your budget.

3.  Use the savings you cut from wasteful spending and apply it to your highest interest, lowest balance debt obligation until it is paid off.  Repeat the process.  This means your add this additional amount to your existing monthly payment to help you pay it off faster.  Choosing the loan or line of credit with the highest interest, but lowest balance first enables you to effectively tackle your outstanding debt, one debt at a time.

4.  Start setting aside savings regularly, no matter how small.  Set a realistic monthly savings goal and include this in the budget.  Think of this amount as a bill that needs to be paid to your savings account each month.  Increase the amount when possible.

Start saving!

Start saving!

5.  Avoid unnecessary debt (anything other than a modest home, one modest vehicle per household, and modest student loans).  Do NOT go into debt for any other reason.  If you have additional debt now, use the first 3 steps above to decrease the amount of debt and do not  create additional debt.

6.  Keep your shopping habits in check. (Avoid bored shopping & social shopping).  If you are bored, stay away from the mall, internet shopping opportunities, and shopping networks on television.  If you go shopping with other people, don’t ever feel pressure to buy anything simply because others are buying.

7.  Beware of advertising. If watching tv is increasing your spending, stop watching tv.  Don’t feel pressured to buy something because you’ve seen it advertised, or it seems like everyone already has it.  Odds are you don’t really need it, whatever it is.  Take careful inventory of your needs versus your wants.

Hopefully this list offers some great insights that you can apply right away.  Whatever theme you choose for 2014, I am certain that greater financial security will aid in your success this year!

Guest post by Bryce Thomas

prudent living

Linked To: GoodTipsTuesday, WFMW, PennyPinchingParty, WakeUpWednesday, WhimseyWednesday, WonderfulWednesday, FabulouslyFrugalThursday, DIYAccomplished, ThursdayFavoriteThings, CatchAGlimpse, TimeTravelThursday, ThinkTankThursday, PintasticPinterstingParty


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