Hi! I’m Kathleen, and my corner of the internet is Frugal Portland. Thanks, Jenetta, for letting me write something!
Do you want to improve your finances? I think we all do. I mean, who doesn’t want a better handle on their money this year? I’d like to suggest 3 things you can do to improve your finances. That’s all, just 3. Follow these and I promise, this year will be better for your finances than last year!
1. Stop Using Your Credit Card (If You’re in Debt)
According to debtconsolidation.com, Americans have over *100 million dollars* in credit card debt. Holy smokes, you guys! This is a crazy number, and if you’re one of those, make this the year you stop getting deeper into credit card debt. It’s okay if you can’t pay it all back this year, but if you carry a balance, just stop using those cards. Switch to debit.
2. Make Savings Automatic
The savings rate of the average American is abysmally low. Did you know that before the advent of the 30-year fixed mortgage in the 1950s, a family had to save up enough money to pay cash for a house if they wanted to fulfill the dream of home ownership? And now, we’re all so financed that we’re basically tied to our jobs. If you want to increase your savings, you’ll have to change your mindset. My household is saving 50% of our pre-tax earnings in 2014. You don’t have to save that much, but if you want to save anything, you’ll need to do it first, at the beginning of the month. The mentality that ends with, “and anything left at the end of the month goes to savings” will ensure that you do not end up saving enough.
3. Start Downsizing!
Did you know that the 80/20 rule applies to things at home, too? We use 20% of the things we own 80% of the time. The logic that follows is that there’s a fairly high percentage of things we own that *we never use*. Start with your closet. I recently wrote about how to start a minimalist wardrobe. There are great tips there, and once you start paring down your closet, you’ll find that the old “I have nothing to wear!” comment doesn’t apply since you’ll only keep the items you love.
That’s it. Do those 3 things, and you’ll improve your finances this year. No new debt, save more money, and get rid of some of your stuff. It’ll change you, for the better!
**About the author:** Kathleen O’Malley writes at Frugal Portland about living simply, increasing productivity, and saving money. Join the conversation by signing up for her newsletter or learn more here.
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