Financial tips for a bright and successful 2017

Simple decisions and new habits might lead you toward a better financial future.

In life, there are times when simple decisions can have a profound impact. The same holds true when it comes to personal finance. Spending less than what you make, investing and saving some of the difference: this is the classic path toward improving your financial situation.
Here are some simple and specific way you can pursue that path and be better off financially – in both the near and long term.

Train your brain to spend less money. There are some interesting studies that show using cash rather than credit to make purchases can rein in spending. If you want to turbocharge this trick, ask your bank teller for crisp, new bills to carry in your wallet, preferably in the largest denomination that makes sense for your budget. Doing so can slow down your spending as you subconsciously try to hang on to these big, pretty bills.1

Go on a money diet. Some expenses are obligatory, others spur-of-the-moment and unexamined. Pause and think before you buy something; do you really need it? If you separate your needs from your wants and say no to several of them, you may find yourself living a simpler life with less debt and more cash. Additionally, you can consider forgoing several purchases a month to see what happens. A recent SunTrust bank survey found that roughly a third of U.S. households earning $75,000 or more live paycheck to paycheck. Earlier this year, Money noted that the average household credit card balance was nearly $16,000. In short, people are spending too much.2

Use less credit. Every time you pay with cash instead of credit, you are saving pennies on the dollar – actually, dimes on the dollar. At the start of December, the average “low interest” credit card in America charged users 12.45%, the average cash back card 17.15%. If you want to see your bank balance grow, try consistently paying in cash. There is no need to pay extra money when you pay for something.3

Or, use more credit. If you are one of those people who consistently pays off your credit card every month, you can add a little bit to your bottom line by choosing to pay with a credit card that offers points or cash back. If you decide to do this, pick a card that has rewards that you like. Some cards offer travel points that you can use for multiple airlines. And some Amazon-affiliated credit cards give back as much as 3% on Amazon purchases.

Harness the power of reducing recurring costs. Recurring costs come in many forms: Insurance, utility bills, and grocery shopping to name a few. Many insurers will give you a discount if you turn to them for multiple policies (home and auto, possibly other combinations). This may help you reduce your overall insurance costs. Similarly, you can sometimes bundle internet, phone, and cable to reduce communications spending. Spending a day or two around the house to optimize your use of water, gas and electricity – by finding and eliminating leaks, for instance – can also add up to big savings over the course of a year.4

Spend less money on “stuff” and more money on experiences. Many people associate possessions with well-being – the more “toys” you have, the richer your life becomes. That kind of thinking can quickly put you deep in debt. You may find yourself living on margin as your “toys” depreciate. We all want to splurge now and then, but try spending money on memorable experiences instead of flashy items – you may find the former many times more valuable than the latter.

Citations.
1 - http://phys.org/news/2012-11-money-crisp-bills-bank.html [11/13/12]
2 - time.com/money/4320973/why-you-are-poor/ [6/6/16]
3 - bankrate.com/finance/credit-cards/current-interest-rates.aspx [12/1/16]
4 - huffingtonpost.com/gobankingrates/35-life-hacks-that-will-s_b_7308392.html [5/18/15]