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If you're like many Americans, getting financially fit falls into one of the top three spots on your New Year's resolution list. And, just like your physical health, conquering bad financial habits can be much easier when you have a coach. Here's a guide to help you start 2020 on the right track.
Week 1. Write it down. Think about what you want to accomplish in 2020. Do you want to save $100 each paycheck? Pay off a lingering debt? Max out your IRA contributions? Remodel your kitchen? Consider your personal goals and your goals for your family. Every good strategy starts with a written plan of attack.
Week 2: Cut out the fat. What can you eliminate from your budget to get closer to your goal? Maybe you subscribe to a streaming service you never watch? Can you make dinner at home instead of eating out? If you're carrying a balance on a high-interest credit card, transfer it to a new card that offers a lower rate. If the card earns points, redeem your rewards as statement credits instead of choosing gift cards.
Week 3: Develop healthy habits. If you have trouble saving money, remove the temptation to spend. Have money direct deposited from your paycheck into saving and investment accounts before you can spend it. Or, if you find yourself going through periods of extreme spending followed by extreme saving, consider the role your emotions might be playing in your finances. Before you make a nonessential purchase, give yourself a day or two to think about it to ensure it's something you really want.
Week 4: Celebrate and adjust, if needed. Go back to week one and review what you set out to accomplish. Then, celebrate any progress you made toward your goals – no matter how small. If something isn't working, don't be afraid to adjust.
Getting financially fit isn't a sprint, it's a marathon, and you need to work at it every day. Fortunately, you have a coach to guide you. Contact your financial advisor to discuss your 2020 goals and where you'd like to be this time next year.