Month: January 2025

Is your New Years Resolution in the toilet?

smbaccari

So how are you doing on that New Years resolution!

According to AI and USA Today… January 10th is when most New Year’s Resolutions are abandoned. This usually happens during the second week of January. Wow! Apparently, it also has an official name, “Quitter’s Day”.

A little harsh if you ask me, but no one is really asking me….This week, the link to USA Today also informs us about the three most popular resolutions. These resolutions are to save more money, eat healthier, and exercise more.

What are most people doing wrong if they cannot even do this for more than 10 days? Let’s start with the goal of saving more money this year. Assuming you are not so far in the RED with your finances. If every dollar goes out to pay bills, you are in a difficult situation. That is a separate blog and a real struggle for many. IF that is not the case… go to your on- line banking app. and “AUTOMATE” Some amount of money EVERY month to the “savings” area you want to increase.

Maybe it’s only $25 or $50 but set it to be automated. Maybe you automate $50.00 a month from checking to savings and you have this happen on the same day each month. Use your birthday as that date, so you remember this will happen. If your birthday is on the 12th of any month, then a transfer is automated on that date every month. The automation occurs on the 12th of each month. This can be used for your 401K as well. Change the dollar amount of % you now contribute. Most of us can get access to the “dashboard” of our 401K’s.  Go in and up the % taken out each month.  If you do not have a 401k and your employer offers one… Sign up!!!! Once you’re in, automate an amount EVERY month and make sure you do not have it sitting in cash!  If this is over whelming CALL the company your company has the 401k with and TALK to someone! If you do this ONCE, you have completed your goal of saving more!

How cool is it that you can keep your resolution by just taking 5 min. to 30 minutes. to do just one of these tasks!!! Even a 1% increase makes a difference in the long run. Now a days there is no excuse for not setting it and forgetting it. The process is fairly pain free.  Maybe at the halfway point in the year you automate something else! Don’t think if I make a bad decision the first two weeks of the year, that’s it, I blew it. Nope, just re-group, start again. If you set a resolution that is too big a goal, it’s hard to stay focused. When you set small goals, it’s still a goal, and you should feel good about the accomplishments.

While we here… Lets think about the other two big resolutions.

To eat healthier… This is not always easy. I get it… Maybe you start cutting back on eating food from a BOX. aka processed food. I know I love a good box of Stovetop Stuffing too! It’s a start! As for the exercising more… Why is this so hard??? For me… not an issue, I need my endorphins! But I understand it is not for everyone. You can start with 10 minutes. a day you know. Ya go outside and walk for 10 min. EVERYDAY! That’s it. After a week or two,  go for another 10 minutes. later in the day. Look at you walking 20 minutes. a day!!! On the weekends grab a friend and get crazy and walk for 30 minutes. together! I know it’s winter. I live in New England; we get snow and temps. below zero with the wind. Walk in your house, set a timer and keep moving, maybe add a set of stairs. Just walk the stair, no need to run them.  Just NIKE it and JUST DO IT! 😊 This will allow you to meet your goals! Small goals and build from there. It’s still January. Even if it was June, there is still time to check those resolutions off the to-do list as done! You got this!!!! 

Your Emergency Fund, is that the right name for it you may ask?

smbaccari

I was listening to a podcast this morning asking this very question. Well, I guess it really doesn’t matter what you call it. I think whatever “You” name it is what it is. The term “emergency funds” is not a comfortable term for you? That is fine, whatever works for you right? After all it’s called “personal” finance.

Building an emergency fund is crucial, no matter what you call it. It is the FIRST thing any financially savvy person would advise you to do. Most of us might get into credit card debt because we charge things on a card. This happens because we do not have the cash. I don’t mean just the small items we buy. Coffee here and there or lunch can certainly add up! The big stuff that is not part of your typical expenses. This is your deductible for a car repair or medical bill.

The refrigerator stops working. The faucet on the kitchen sink falls off in your hands. It happens at 9 PM on a Saturday night! Ya that happened! This is what an emergency fund or whatever you want to call it, is for! Life happens, and sometimes it’s very stressful! NOT having some extra cash to pay for these unexpected things makes it VERY stressful. In the long run, it becomes more expensive.

When I think of an emergency fund, I think of 3-6 months of expenses in accessible cash. This is what most of us consider necessary in case you lose your job. If your expenses are $3,000 a month then you have $9,000-$18,000 in savings. This is NO easy task to get to this point, and maybe you never get to a full 3 months. But it’s a good idea to try and worse case you have something to lean on.

This is not to say that you only spend this money IF you find yourself out of work! Your emergency fund, or whatever you name it, only has $200 in the account. I like to think of it as the de-stress fund.

But let’s say you get a flat tire and need to get it fixed so you can get to work. That $200 in the emergency fund can help you do that. This fund saves you from putting more on that credit card you are trying to pay down. How much you have in this fund is really a preference and what you need to be comfortable with. Remember this “fund” takes several months to build. It can take a year to reach your personal goal for the fund. Think of this “account” as a revolving door. Money will come out and the balance goes down. Next month, you cut out a few extras. You put that money into the emergency fund instead. The goal is to have money set aside for the “unexpected”.

And NO this is NOT what the “credit limit” or CASH advance on your credit card is for! It is NOT something you should use for your unexpected stuff! Assuming you can help it…That is NOT an emergency fund! IF this is what you use as the emergency fund, the odds are good this will spiral out of control. Everything we do related to personal finance takes time.  When you make minor changes along the way, they start to stack up. Now you have created a new positive habit. Whatever you call this special account really does not matter… Just work on creating one! Get through the first few months of building this account and trust me you will feel empowered.  It’s a new year, so get on it! Next year at this time, you will look back and see the progress you have made. The sense of calm this will bring you is undeniable.  Good luck, you got this! 😊