This is the new year. January 2018. Around this time people are in the beginning stages of their New Year’s Resoluton. Some of those resolutions involve finances: paying debt, saving more, etc.
Rather than make a New Year’s Resolution, why not make a Financial Pledge? It’s a pledge you would keep to yourself no matter the year or the circumstances. The Pledge would be a SMART Pledge : Specific, Measurable, Achievable, Realistic and Timely.
I have been reading that there is a possibility of a recession coming in 2020. Not to rain on anyone’s parade, but an economic downturn whether it be affecting almost everyone in the United States or an economic downturn in your own personal life can happen.
Making a Financial Pledge is far better than making a resolution as the Financial Pledge is a true life long commitment and not just something you say just because a new year approaches.
1. Financially Pledge that within the next two years you will pay at least 30% of one debt or 30% of your combined debt.
2. Financially Pledge that if you are not currently contributing to your retirement plan or a retirement plan you will. Also, if you are, Financially Pledge to increase the amount and if that squeezes you financially seek to reduce an expense rather than cut back on your retirement.
3. Financially Pledge to never buy more house or car than you can afford.
4. Financially Pledge to educate yourself about personal finances.
5. Financially Pledge to get a financial planner who would be willing to take a look at your current situation and give you ideas to improve.
6. Financially Pledge to no longer use your credit card. Even if you have a high balance, don’t feel defeated and make that additional charge because “my credit card is already high.” Just stop charging.
7. Financially Pledge to start or increase your funding of your emergency fund. Even if you start with $25 per month of a starting contribution or an increase that money starts to build over time.
8. If you so choose and you have children, Financially Pledge to put something away for them even if it’s paying for their books while they are in college.
9. Financially Pledge that you will curb your spending habits. Some of us shop just to shop. I have been known to have the same or similar looking items in my closet. One thing that I LOVE are jeans. At one point I had 25 pairs of jeans and yes, I wore all of them. But who really NEEDS 25 pairs of jeans.? That’s almost enough to wear a different one each day of the month.
10. Financially Pledge to put away savings for trips, and lesser expenses such as new tires for a car, or an appliance that you know you will need to replace in the near future.
I am no expert of living through a recession but in my adult life I’ve lived through two. I have been blessed that I never suffered a job loss due to one as I had a tremendous amount of consumer debt that would have definitely wreaked havoc on my life had I not the means to pay on it. Financially Pledge today that you will develop a system, not just a resolution, to improve your finances.