New Habits for the New Year
By: Jill E. Gleba
We are right in the middle of the holiday season. The best gift you can give yourself and others is to enjoy the day, enjoy the moment, and make it the best it can be. After the rush of the holidays is over, many of you will make New Year’s resolutions. Even if you do not proclaim a formal resolution, most of us still look back at the previous year, and think about what we might do better or differently in the coming year. Improving your financial life may be one of the most important goals you will have. Creating new habits may be the key to your success. My job is to make life easy for my clients, and I will share some simple tips for you to follow.
· In February, after you receive your bank statement, look at your cash flow for January. Note the NET income that you received this month. Your NET means the actual money that was deposited in the bank for you to use. (This is your inflow). Repeat every month.
· Starting in January, circle or highlight how much money was used to pay bills from your checking account statement. This number should include automatic bills, and all written checks. Also, include how much money you took out of the ATM for spending money. Note the final number. Pray that this number is less than the “inflow” number! (This is your outflow).
· Take one day per month, preferably after you receive last month’s checking account statement, and look at your inflow vs. outflow. Just look. Two numbers, 10 minutes of your time. Simple yet powerful.
I can already hear some of you with questions such as “What if we have several accounts?” Combine, consolidate, and make your life easier. It is easier to keep track of one or two accounts rather than 3 or 4. Also, keep in mind, I just want you to figure out what you take in every month as net income, and what do you spend every month. The first step in becoming financially successful is to knowing your cash flow. If you succeed, your fixed bills will become predictable, and saving will become easier.
· Pay off and cut up all of your credit cards except one or two. You only need one or two credit cards in your wallet. Receiving one credit card bill per month will keep your life simple. Your second card should be used for back up or emergencies. You should also be getting points, products, or airline miles for your trouble.
· Pay your bill on time every month. Do not pay any late fees or interest. Put an alarm on your phone, write it on your calendar, or keep all of your bills in one place in your home, and put them in order as to when they are due. Pick one day per week when you address your bills.
· Set up your bills to be paid automatically through your checking account. This will save you time and money.
After you have a handle on what you receive and what you spend every month, you will naturally start to question your values. How do you want to spend your money? What is most important to you? Most people do not have enough money to accomplish everything, so you must pick the goals that are most important to you. For example, if you have an extra $600 per month inflow, you may choose to put $200 into an emergency account, $200 into a college account, and $200 into retirement savings.
So, just for the first quarter of next year, your goal will be to know your cash flow, save for what is most important to you, and do not let the little things get in your way. By conducting this exercise, you will naturally start to question yourself and how you spend your money. Try to make one improvement per month and you should have a better future. Good Luck!
Jill Gleba is a full-service wealth manager and owner of Gleba & Associates with 20+ years of financial guidance and coaching experience. She also owns Anne William, LLC, a real estate holding company.
Contact Jill at info@glebaandassociates.com
46 E. Square Lake Road, Troy, MI 48085
248-879-4510
Many of you have been kind enough to write to me with your questions. Please feel free to keep doing so; we may use them in a future column to share and help others.