Refresh your financial mindsetFinances
When it comes to saving money and keeping a balanced budget, how you think about money can change everything. When a new year starts, rethinking your savings strategies and updating your financial mindset may help you spot holes in your existing plans.
Use this checklist to get started.
Tips and strategies to keep yourself on track:
- Reevaluate any stale strategies
Financial advice is often evergreen, but that doesn't mean that the same strategies work year after year for everyone. Financial professionals sometimes call relying heavily on one piece of advice an "anchoring bias," because an individual will anchor his or her financial planning on a nugget of advice that may or may no longer hold up. Revisit any advice that you have long considered to be true in case it has become outdated over time.
- Think long- and short-term
How focused are you on building up your retirement funds versus saving for your next year's tropical vacation? Take time to think about what your most important goals are and build your monthly and yearly budgets around your actual needs. If you have been maxing out your 401(k) for the last decade, reallocating some of your salary toward a medium-term goal, such as saving for a down payment on a house, may become a goal for this year. Or if the idea of changing your savings plan will stress you out, plan to keep any bonus or extra funds you receive this year, such as tax refunds, and put them toward your goals instead of using them on an expensive impulse purchase.
- Break the status quo on monthly bills
Bills roll in each month, and it can be easy to see them as nonnegotiable. But even monthly charges that you have reluctantly assumed are unchangeable can be discussed. This includes your health care premiums, Internet service provider, credit card fees, gym memberships, cell phone plans and even your rent. Start the process by reviewing your bills and seeing whether other providers are offering better or promotional rates. If a different cell phone provider has a comparable plan for less money, for example, call your current company and ask for a price match. In addition to renegotiating bills, review your current monthly statements and double-check that there are no sneaky expenses.
- Splurge strategically
Treats like avocado toast often make headlines as examples of ways people waste money, yet they may not be a waste for you. If you want to stop by your local coffee shop every morning for that double espresso because it makes your morning more pleasant, that may be money well spent — as long as you remain mindful of how much you are spending over time. Find other ways to cut your monthly budget that will allow you to indulge in the treats that you prefer.
This information is brought to you by Athene — where unconventional thinking brings innovative annuity solutions to help make your retirement dreams a reality.