5 Tips on How to Not Financially Screw Up the Start of 2018
Happy New Year!
Oink oink, Piggies! Now that 2018 is here, it’s time to burn off that Christmas feast fat, get off of our behinds, and get back to normal life. The start of a new year is a great time to reflect on the previous year, make resolutions for the year ahead, and simultaneously get rid of bad habits with a fresh start. So, how is the best way to not screw up the start of 2018?
How to Not Financially Screw Up the Start of 2018
1) Decide that you are not going to screw up financially.
First, make up your mind to not screw it up. Seriously. Now is as good a time as any to get your piggy bank in order. If you know you’re doing something dumb with money, then decide that you’re going to stop doing that dumb thing. Likewise, if you know you’re being dumb by not doing something with money, then decide that you’re going to start doing that thing. If you don’t decide you’re going to not screw up financially, you might not ever stop screwing up financially. You know the old saying: You can lead a horse to the water, but you can’t force it to drink. You’ve got to want to not screw up.
2) Read my favorite financial book, How to Get Rich and Stay Rich by Fred J. Young.
I don’t get paid for recommending this book. It’s just an amazing book that changed how I view money and wealth. The bottom line is this: Spend less than you earn and invest the difference in something that goes up in value. Read the book. You won’t regret it.
3) Spend less than you earn.
Before you can really start investing, you’ve got to have something to invest. If you’re spending more than you earn, you need to stop. Seriously, that will only lead to financial (and probably emotional, psychological, and many other types of) ruin. Do whatever you have to do to get your spending down and/or your earning up so that you can save something. You will never get ahead if you spend more than you earn (and it’s easy to fall into that trap).
4) If you have debt, figure out a way to get out of it.
If you have credit card debt, student loans, a house payment, or anything else that you owe money on, make sure you have a clear plan on how to get out of it. For credit cards, you should never carry a revolving balance (you must pay it off in full every single month when the bill is due to avoid any interest, or else you should not own credit cards). For student loans, hopefully you don’t have any. If you do, hopefully, you don’t have much of it. Regardless, make sure you have a plan to get rid of them. For house mortgages, make sure it makes sense for you. If you’re paying anything more than a super low interest rate on it, then you better pay that sucker off as soon as possible. On the other hand, if you’re paying only 3.5% interest, have the money to pay it off but choose instead to invest it and are getting 7-10%+ return on it, then that may be another story. Always have a plan to get rid of debt, and follow that plan. Ask someone for help if you don’t know how to have/follow a plan.
5) Invest, invest, invest.
People generally don’t grow wealthy by going to a 9-5 job. Sure, there are examples of people who do, but I’m talking about the situation that most people find themselves in. Most people who don’t inherit a huge trust fund have to make a living by going to work. For them to grow wealthy, they’ve got to invest over a long period of time. Spend less than you earn and invest the difference in something that goes up. For me, I really like good-quality stocks and index funds (ETFs). Invest in something smart and leave it alone.