Well, the holidays are over. We can debate about how long Christmas decorations should stay up (until Epiphany on January 6th), but the financial hangover has probably already started. A great way to start the new year is with a fast. Not from alcohol, or carbs, or chocolate, even if my hips could use all three. A financial fast. Here’s three things to know:
How it Works: For the month of January, don’t spend anything you don’t have to spend. Bills have to be paid, but that’s all. No going out, no clothes, no fast food. No picking up something cute at Target while you’re there for a prescription. Make your coffee at home and pack your lunch every day. Only spend money on things that are required to maintain your household or your job.
Why You Should: It helps shift your mindset from spending out of habit and convenience to using money intentionally. The fast requires you to be creative (what free activities can we do?), plan ahead (how can I feed everyone when we have 25 different activities on the same night?), and have strong discipline (I’m exhausted; can we just order pizza?).
What Happens in February: After the January reset, it’s important not to just resume your spending habits. Introduce spending on wants as a luxury, not an everyday habit. Eat lunch out once a week, set aside a small amount of money for little purchases. Cash is great for these – you each take out a set amount for individual wants, and a certain amount for family spending.
With any habit you want to change, pick one thing to tackle at a time. January is not the time for a financial fast and a new diet. At the end of the month, you’ll have some new habits and tools for using your money wisely.
CovingtonAlsina is a Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.
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