Although unemployment rates are at a 10-year low and people’s optimism about their own financial wellbeing is growing, many Americans still feel unsure about their financial future. We’ve compiled a list of our favorite financial-preparedness tips to help you step into 2018 on the right foot.
1. Boost your emergency fund
Most Americans don’t have enough money in savings to cover an emergency $1,000 expense if they needed to. As you get your first paychecks of 2018, try to build an emergency fund that can act as a safety net if anything happens—car breakdowns, medical bills, or job loss. Automatic withdrawals from your bank account can help to prioritize saving. A good emergency fund has between 3 and 6 months of household income stashed away.
2. Take a look at your retirement plan
After you’ve built an emergency fund to take care of unforeseen expenses, revisit your company-sponsored retirement plan. If your employer offers matching (nearly half of all employers do), contribute as much as you can to get the maximum match. Don’t leave free money sitting on the table!
3. Your benefits are better than you think
Many employees say they don’t fully understand all of the benefits that are available to them through their employer. Chat with your HR representative every few months to see which benefits are available at your organization and get insights into how you can better utilize them. In most cases, employer benefits are tailored to known employee needs and can get you steep discounts at partner businesses and programs.
4. Don’t be afraid to ask for discounts
Nearly every one of your bills can be negotiated down to a lower rate. If there are similar service providers in your area, you can often negotiate your current rates down with everyone from your internet service to your homeowners insurance company.
Consider creating automatic reminders on your smartphone to follow up with your service providers every few months to seek new discounts. Reducing your bills by just a few dollars a month can make a big difference at the end of the year.
5. Cut back on subscriptions
The last few years have seen a tremendous rise in the popularity of media and delivery subscriptions. If you’re currently paying for music services, Netflix, Hulu, and other monthly subscriptions, you may not realize how much is coming out of your bank account every month. Audit your subscriptions to see if you really need everything you’re paying for.
Tip: Some companies, like T-Mobile, have started including services like Netflix into their service plans for free. See if your phone or Internet provider does the same.
6. Start a side-business
Companies like AirBnB and Fiverr have revolutionized the way people can earn extra money on the side. If you have a unique skill or have extra time on your hands, consider finding a way to monetize it to get extra money flowing in. These extra jobs don’t have to turn full-time and can help you pay down debts or invest more into your future.
How are you preparing for your finances in 2018?