6 Ways to Improve your Finances in 2018

With a New Year comes new goals and new challenges. A New Year brings a chance to make improvements to yourself, your situation, and those around you. One important goal for many people is the improvement of their finances. Here are some tips on how to make 2018 a great year for your Financial Health.

Create a budget

I wrote about budgeting for Financial Health and Wealth’s first post here, so I will give you the quick hits on how to do it.

  1. Track spending
  2. List necessary spending (bills, utilities, food, etc.)
  3. List savings (emergencies and retirement)
  4. List discretionary spending (fun money)
  5. How do you finish? Make adjustments as needed

Start a holiday savings plan

Did the holiday season sneak up on you? Did you have money available for presents and other items that accompany the holidays? Start the year off right by starting a holiday savings plan. Save a little bit every day, week or month. By November, you will have plenty saved to help with your holiday shopping.

There are a few popular ones. You can find them here and here.

Create an emergency fund

If you don’t have one already, it’s time to create one. An emergency fund does exactly what you think, it pays for emergency expenses. If your car breaks down or you need to replace your air conditioner, you pay for that with your emergency fund so your normal budget doesn’t take a hit.

Start by transferring $20 per month from checking to savings. Once you get comfortable with that, increase the amount you transfer or increase the frequency. Personally, I transfer $25 per week to our emergency fund and increase it by a few dollars a couple of times throughout the year.

Pay off your credit cards

This one speaks for itself, but do what you can to pay off one or more credit cards. These are the two most common methods used:

  • The Debt Avalanche Method – Using this method, you pay off your credit card with the highest interest first. You make minimum payments to all of your other credit cards and throw as much money as you are comfortable with (hopefully well over the minimum) at the card with the highest interest. Once you pay off that credit card, all of the money that was going towards it goes towards the card with the next highest interest rate. Repeat this until you have nothing left. Boom! This method helps you save money on interest payments.
  • The Snowball Method – The other method is pay off the card with the smallest balance. You pay the minimum on all of your other cards and pay as much as you are comfortable with towards the card with the smallest balance. Once you pay that card off, you put the money you were using on that card towards the card with the next smallest balance. Repeat until you have nothing left. This method gets you a win right away to make seem like you are really chipping away at your debt.

Review your investments

Go to your retirement account, brokerage account, or any other account where you have investments and review them. If your goals or risk tolerance changed at all throughout the year, make adjustments as needed.

If your risk hasn’t changed, it might be a good time to rebalance your portfolio. Here’s what I mean by rebalancing. When you first set up your investment allocation, you pick certain investments and corresponding percentages based on your risk tolerance and time horizon.

For example, you are fairly tolerant to risk and have a long-term time horizon. Your portfolio may be 70% stocks and 30% bonds. Throughout the year, your stocks will probably perform better than your bonds. By the end of the year, your investment allocation is now 73% stocks and 27% bonds.

Rebalancing your allocation means returning to the original amount, 70% and 30%.

Minimize fees

Do what you can to avoid unnecessary fees. Fees over the long term can dramatically eat away at an investment portfolio. If you invest in mutual funds, avoid any with an expense ratio above 1%. Ideally, you should choose funds with a ratio less than .5%.

If you have an old 401(k) or two from a previous employer, it probably makes sense to roll it over to an IRA. The administrative fees associated with a 401(k) are generally much higher than that of an IRA.

Regardless of where they are coming from, be wary of any fees, and try to keep them as low as possible.


There are many facets to this beautiful thing called life, and while money isn’t everything, it is important. Use some of these tips to help progress your Financial Health and grow your Wealth.

So readers, what financial goal do you wish to accomplish?

Published by

Financial Health and Wealth

I am a Financial Consultant and Blogger. I live in the Greater Milwaukee area. I am married with a six-month-old son. My goal with this blog is to educate people to better understand basic finances and to help save them money along the way

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