By Lynesha McElveen

2013 is here. The holidays have come and gone and many of us were shopping like there was no tomorrow. As a matter of fact many of us haven’t thought about our spending all year long. Now is a great time to look back at your spending, evaluate your habits, and develop new ways to cut costs and save for the future.

Here are 5 Tips to Get on a Good Financial Footing for the New Year:

1.  Look at your spending over the last quarter. Evaluate when you spent more or when you spent less. Did you spend more during months you did holiday shopping? What about when making purchases for holiday meals or travel? Next year why not try creating a holiday fund and budgeting monthly for these costs. The holidays come every year, so since we know this we can set a steady amount to save each month to meet these needs.
2. Look at the places you overspent and find ways to cut costs. Did you spend too much money on eating out, entertainment, shopping, or children’s activities? Try the envelope system figuratively or literally by placing a certain amount of money in each category/envelope. When the money is gone, you have no more to spend. You are not allowed to move money around into different categories. Any money left over should be saved. This is a tough love approach, but it works.
3. If you are unaware of how much money you are spending track your expenses. You can track your expenses by writing down each item you have purchased, the date, and the amount you spent. Do this for at least a week to get an accurate account of your spending and find out exactly where your money is going. This is an excellent tool for indentifying habits that eat up a budget like buying daily snacks or coffee.
4. Figure out the source of your bad spending habits. Do you shop more when you are bored? If so, find a hobby or take up something new to keep your interest. Do you eat out because you feel you don’t have the time to cook? Prepare several meals for the week on Sunday evening. This way when you get home, you can just pull the meal out the freezer and heat it up. Do you allow your kids to get into every activity they want, even if they quit them before seeing them through? This not only waste money, but doesn’t teach kids to build endurance. Allow kids to get into 2 activities a season. If they don’t like an activity, require them to complete it before switching to another.
5. Stack your savings by paying yourself first. This concept is a staple to building wealth, establishing an emergency fund, and having money saved to achieve financial goals. Get in the habit of paying yourself before paying any bills, creditors, or making any purchases. If you do this, it will force you to manage the money you have left to meet your obligations, and soon you won’t even miss the money. Be sure to allow your money to go into a savings account that is not easily accessible through things like debit or ATM cards.

In order to achieve financial success, it is important we take a realistic and accurate look at our current habits. Although this may be painful, reviewing our fiscal fourth can help us get on track to ensure each financial quarter from here on out is amazing!

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