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After spending several years in social services, Nicole has finally followed her lifelong dream of being a full-time writer. In addition to her work for The Hudsucker, Nicole is also a staff writer for Womanista. An avid comic book fan, BBQ aficionado, professional makeup artist and first-time mom, Nicole can be found exploring Kansas City rich history when she's not blogging about suburban life at Suburban Flamingo.

Getting “Financially Fit” in 2014

It’s 2014.  You survived the madness of the Holiday Season.  Depending on your personal traditions and beliefs you may have spent lots of money on gifts or food or travel or even just some self-care to escape the hustle and the bustle of everyone else partaking of their traditions.  You might even have decided that the new year would be a clean start and joined your fellow human in making some resolutions.  A week later, however, the leftovers are gone, the decorations put away, willpower has been tested.  What now?

Credit: Stop Worrying About Money

Credit: Stop Worrying About Money

“What now” will end up, for many, to be a financial reality check as the bills from the holiday start coming due.  For people in the United States the financial reality check may also include some changes in taxes, withholding, and employment status changes thanks to various pieces of legislation.  It is never a bad time to start working on your financial fitness, but January is a great time to start because it’s a place in time where one can clearly see where they’ve been (last year’s bills) and what they have to work with for the next twelve months (hey, new calendars generally start with January for future planning purposes…)  The great thing about financial fitness is, unlike physical fitness, it is actually very easy to do.  It just takes a little bit of thought and some small changes to end up with big results.  Here are some simple suggestions to make your financial self fitter in 2014.

Figure out where your money is going.

You can’t stop a leak you don’t see, right?  Your money is the same way.  It is incredibly easy to spend money without realizing it, especially since most of us rely on our debit cards instead of cash.  Fortunately it’s fairly easy to see where your money is going by keeping a Money Tracker for a week.  It is pretty straightforward: for one week, write down everything you spend money on.  There are lots of ways to do this, but my method is to keep a small envelope or zippered pouch in my bag and get a receipt for absolutely everything I buy during tracking week.  Buying a soda at the little newsstand in the mall?  I get a receipt.  Pay a bill?  I print the confirmation or copy the statement.  If I pay for something in cash that doesn’t have a receipt, like  vending machine, I write it on the back of one of the other receipts, document what I bought and when.  At the end of the week I set aside a little bit of time to write it all out by day and look for patterns.  I did one for this article and was horrified to discover that I had spent nearly $40 on Starbucks.

Once you know where the money is going, look for ways to save.

That one week look at your spending won’t tell you everything, but it will show you some major things (like my sad Starbucks issue.)  Look for patterns. Usually those patterns will give you an easy way to make a change.  One of the most common is a repeated event involving food, like endless Starbucks, daily lunch at McDonald’s, or going to the grocery store a few times a week.  All of those are actually pretty easy to change without having to give up too much.  Using my Starbucks issue as an example, when I realized that I was spending that much money I decided that instead of stopping for a cup of coffee there when I could set up my pot the night before using Starbucks beans and make the same drink for much cheaper.  If I do this even a few days a week I’ll save big and not just because I will pay less for the coffee, but because I won’t be buying the extras there, like the cake pops I love so much.  Grocery store your problem?  Try making a list on Sunday of what you think you might need for the week and make one trip.  You’ll spend less.  Eating out?  Pack lunch one day a week.  Small changes add up.

Add up those small changes and save them.

Savings is perhaps the second most-feared word in finance (the first being “budget”).  This is because saving money seems impossible, especially when you think of it in terms of some of the popular buzzwords and concepts, like the emergency fund.  The reality is, however, that savings doesn’t have to be a huge chunk out of your money.  Paying yourself first, debt snowball, and emergency funds are all excellent ideas and work very well for some, but if you’re already trying to make it all add up or you’ve never been able to save well in the past your best bet is to start small.  There are lots of ways to do that, but the one I really like is the 52 Week Savings Plan.  Why this one is so great is that it takes the idea of small changes and builds on them over time.  The concept is pretty simple: you save one dollar for the number of week of the year it is until, in the very last week of December, you put aside $52.  By doing this you ease into saving money (my January savings has one dollar in it right now!) but end up building near $1400 in savings by the end of the year.  It starts of easy and then gets more challenging, but the payoff is big, in terms of money saved and in what you learn.

Be gentle with yourself.  Even a little victory is a win.

You can track your spending, trim your costs, and save the small change until the cows come home, but if you can’t forgive yourself for a slip up you won’t truly be financially fit.  There will be weeks when your grand plan to make your own coffee more than you go out gets shot down because you had a power outage one morning or your coffee pot broke or you had an emergency trip.  There will be times when an unexpected bill means you can’t put Week 26’s allotment into savings.  Maybe you’ll slip back into old habits and have to redo the money tracker.  These things are normal and more than normal, they are okay.  It’s okay to make mistakes and it’s okay to get up and pick up where you left off.  If you make a change that means you save more money than you did before, even just a little, you’ve had a win.  Be proud and  keep going.

There are many more ways to be financially fit and progress into true financial security, but these are just some good places to start.  The best thing about financial fitness is that, just like physical fitness, once you see the results you’ll keep going and pretty soon, it’ll be 2015 and you won’t just be financially fit…you’ll be financially buff!  Happy saving!

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