2017 is almost over. It has been a really interesting year in the ROB household both good and bad. Financially, the good things have been:1) I maxed out my 403b for the second time; 2) We got Mrs. ROB started on her retirement savings; 3) I had an article featured in Rockstar Finance; 4) We got to be on TV regarding the new tax bill; 5) I continue to pay down debt and save without really adding any new debt; 6) our net worth increased by almost 50% this because of the stock market and paying down the mortgage some.
There definitely has been some bad financially: 1) I didn’t hit all of my debt paying goals; 2) I could’ve saved more for Mrs. ROB in her IRA; 3) We had some extra medical expenses we did not account for in 2017. I kind of knew they were coming but didn’t budget for them like I should have; 4) I know I used my credit card way too much and it increased our spending. That has got to stop in 2018.
Small Ways to Improve Your Finances
So although there were things that went well there is always the need for improvement. Here are some of the things I am going to do to try to do better financially in the new year. I think they will help us and hopefully you as well.
First, continue to pay yourselves first. Our savings rate has been ok for the past couple of years and we increased it even more this year. That actually led to a nice increase in our retirement savings. Although I know there are many who say focus on paying off your debt and then save because of our age and desire to be financially independent I am focusing a lot more on increasing our retirement savings. So maxing out at least one retirement account is a must this year.
Second, increase your retirement savings by 1%. So if you think you can’t save a lot for retirement or are just saving the match why don’t you start off slowly by just going an increasing your retirement savings by 1%. So let’s say you save 5% and get a 5% match, why not kick that up to 6%. And then following year 7% and so forth. I seriously doubt you will miss the $20 out of your paycheck or whatever it is.
Third, use more cash. This is a really difficult thing for me, but I think to cut down our spending a bit and the like using cash is the way to go. Cash hurts. When you spend with cash then you know how much you can and can’t spend. Swiping a credit card and/or a debt card is too easy. Besides you spend upwards of 18% more and it can cut down on impulse buying.
Fourth, get one month ahead in our budget. Despite what the TV said on what we earn Mrs. ROB and I still live paycheck to paycheck. Part of that is because of a high savings rate, but it is also student loan debt, consumer debt, etc. And frankly I am sick of it. So I am trying to use our extra paychecks and putting aside a little money to get one month ahead in our spending. So we get paid biweekly and that gives us 2 extra paychecks per year. I want to use those paychecks (including the one for this month) and begin to get ahead a bit. That way if we do have an issue with some extra spending or whatever I don’t feel like putting it on a credit card. I am just going to transfer that money to a savings account we have and try to build it up to one month’s worth of expenses.
Finally, track your spending! We use Personal Capital to track our spending and it is both a blessing and a curse. It is a blessing because I know where our money is going. It is a cure because I can’t believe we spend that kind of money. So tracking our spending let’s us know where we can/need to cut back if necessary.
Notice I didn’t say get a budget. I do think a budget is a good thing, but the truth is Mrs. ROB and I are not the best at sticking to an ironclad budget. Maybe that is something we should do more of and can learn to improve, but I wanted to examine some steps that you can take and that we are going to do/we already do to improve your finances.
What are you going to do to improve your financial picture in 2018?