Our recent New Year’s resolutions survey uncovered a surprising fact: People were more likely to regret not doing something (like not saving enough or not paying down debts) than committing mistakes (such as making an unaffordable purchase or spending frivolously).
In other words, people regretted not being more mindful and proactive with their money. Instead of making intentional decisions based on their financial priorities, their money management was impulsive and reactive.
Sound like you? Here are some ways you can be more proactive with your money management in 2018.
1. Stop living paycheck to paycheck
Paycheck-to-paycheck living is the definition of reactive money management. Each dollar you make is spent each month, and you never have any money left over. You’re simply sprinting to keep up with the next expense, and never getting ahead.
It’s also exhausting. With so much of your money and mental energy spent on just paying your bills, you have no resources left over to better your financial situation.
Getting out of the paycheck-to-paycheck cycle will be key to creating a more proactive approach to your finances — but you won’t do it all at once.
Start with small goals, like having $10 left over each week or an extra $50 a month. Look for ways to cut your spending and grow your income. As you build a buffer between what you make and what you owe, you can afford to be proactive with your money.
2. Save an emergency fund
An emergency fund is another essential ingredient to proactive money management. Among people who fail to keep a financial resolution, 73 percent say they were sidetracked by an unexpected emergency expense or hardship, according to a Fidelity Investments survey.
Whether it’s a medical bill or unemployment, these unexpected situations can derail your efforts and wipe out the progress you’ve made in one fell swoop.
But just because these emergency situations are unexpected doesn’t mean you can’t plan for them. Building an emergency fund will give you the security to quickly recover from unplanned expenses or setbacks.
3. Pay attention to money patterns
If you want to know where to start being more proactive with your finances, look at the money patterns you’ve established. These are the responses or habits you default to when managing your money.
Hopefully, some of them are healthy behaviors that help your finances, but there are probably some patterns that are hurting you.
Maybe you have a habit of taking your credit card out for a spin when you’re stressed. Perhaps you’re frugal to a fault and never feel like you can enjoy your money.
Knowing what’s caused problems in the past will help you find effective solutions for your situation. If you identify your patterns, you can work to change them and create healthier habits.
4. Be mindful with your money
Mindfulness is about cultivating a practice of paying attention to your internal state in the moment, and noticing how that affects your decisions and behavior. This attentiveness to your motivations and thoughts can be a powerful tool to start making money changes.
If you’re mindful with your money, it means that you are looking inward whenever you’re handling your finances. Instead of thoughtlessly spending on a night out with friends, you might keep a tally of your spending so far and make sure it’s aligned with your budget.
If you’re feeling overwhelmed and discouraged by your debt, you might notice that and pull up your debt-tracking spreadsheet more often to remind yourself of the progress you’ve made so far.
Practice paying more attention to your thoughts and feelings around money. As you’re more mindful, you can make simple, in-the-moment course corrections that will keep you on the right track toward your financial goals.
5. Plan your financial future
As you work on your financial habits, setting financial priorities will help you make the most efficient decisions. Instead of trying to do everything at once and spreading yourself too thin, focus your efforts and make progress toward your most urgent goals.
First, identify your top financial priorities. What would your finances need to look like for you to live your ideal life? Find the financial priority that aligns best with your values, responsibilities, and other non-financial dreams and goals.
Once you have your top financial priority, you’ll have a guiding rule for your money management. Instead of just reacting to each money choice individually, you can put it in the greater context of your financial world. You can make sure that each dollar is used to most effectively make progress toward your most important money goal.
No matter where you’re starting from, you can make significant improvements to your financial situation. Learn more about managing your money with these seven ideas to clean up your finances for 2018.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 5.87% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 5.87% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.57% – 6.98%3||Undergrad & Graduate||Visit SoFi|
|2.47% – 5.87%1||Undergrad & Graduate||Visit Earnest|
|2.80% – 6.22%2||Undergrad & Graduate||Visit Laurel Road|
|2.51% – 8.03%4||Undergrad & Graduate||Visit Lendkey|
|2.48% – 6.25%5||Undergrad & Graduate||Visit CommonBond|
|2.57% – 8.17%6||Undergrad & Graduate||Visit Citizens|