Along with other resolutions, don’t forget to make room for building financial footing for your future. Living paycheck to paycheck is a dangerous act as it can make you feel helpless at the time of emergencies. Many times it leads people to take out loans or use credit cards randomly.

You must take some solid financial steps on your own to stay away from the unduly burden of credit card debts and other financial obligations.

1. Follow a 50-30-20 rule while creating a budget

Keeping track of the monthly expenses is important to plan a budget. Once you know how much you have to spend on necessities like housing and food, you can put them in a budget spreadsheet. However, following 50-20-30 rule can help you to stick to the budget without getting overwhelmed.

After receiving your monthly paycheck, allot 50% of your income for daily necessities like food, housing, utility, etc. Then keep 30% for building a financial cushion for future like retirement and emergency fund. Dedicate remaining 20% of your income for entertainment or luxury items.

Be consistent with this budgeting rule to get the desired result.

2. Have financial goals

Until you have some financial goals, you can never be able to achieve them. Whether the goal is retiring before the age of 60, purchasing a home, renovating the home, or planning a vacation, you need to take proper step to materialize your dream.

Stay focused on your goal that you truly want and work towards it to achieve it successfully.

3. Get rid of debt obligations and avoid incurring further debts

If you owe a huge amount of consumer debts, then you may not be able to stay top of your finance ever. Make sure you repay the debts as soon as possible. Live a life within your means to avoid accumulating high-interest debts. Don’t buy things using your credit cards that you can’t afford. Try to use cash or a debit card to curb such cravings.

4. Set up an automated system for saving and transferring money without missing

Automated finance system helps to save money and pay bills. You can pay your bills, transfer money from one account to another without putting much effort. It is a hassle-free option to keep up with your money savings goal.

Consider automating a contribution of 20% or more to a particular account (savings account, retirement account) every month. You can also pay your monthly bills without taking the stress of the last day of making payments.

5. Spend less than you earn

According to the 2016 Consumer Financial Literacy Survey, “1 in 3 American owes credit card debt from month to month, with 14 percent rolling over $2,500”.

The main reason for this credit card debt story is living beyond means. Pew Charitable Trust survey revealed that, in 2016, 55% of American household spent more than they earned in a month.

How can you live less than you earn? It’s simple; forget all your costly habits and leave them behind. Create your budget pretending your income is 20% lower than actual. Thus, you will be able to create a spending plan without crossing your income limit.

6. Save money for retirement and unexpected expenses

50-30-20 rule will help you to set aside 30% of your income in every month. Contribute at least 20% into a retirement account like 401(K) or ROTH IRA and save the remaining 10% for inevitable expenses. Thus, you don’t need to borrow money when you’re in need.

7. Boost your income

Increasing income resources is important to manage the rising living cost as well as to build a solid financial backup. You should consider a side hustle to boost your income. Get ideas regarding part-time jobs online. Asking for a salary hike or applying for a better paying job can also work.

8. Make wise investments

Consider investment to grow your money. At present time, robo-advisors make it easier to plan for a better investment strategy. Some online apps are also good as an investment guide. Invest a small amount ($5) per month at first. You can seek a financial advisor’s opinion before planning a big investment.

9. Set a spending limit to avoid credit card debts

Set a spending limit before you start purchasing things using your plastics. But, only setting a spending limit is not enough as you also have to follow it religiously. Don’t out-stretch your budget as this may push you into the debt clutches. Try to carry a wish list to avoid unnecessary expenses while shopping to stay within your spending limit

10. Consider frugal living

Living a frugal life will give you enough room to save money and live a stress-free life. Using these tips will help you in living a frugal life.

  • Cut back on alcohol this year.
  • Plan your weekly meal to save money on restaurant visits. You can enjoy “soup night” once a week. Soup is healthy, cheap, and tasty as well.
  • Block your favorite shopping websites to avoid temptation.
  • If you have lots of gently used clothes in your home, sell them on Ebay or consider recycling.
  • If your friends ask you to go for a lunch or a dinner in every alternate day, tell them to plan for a tea party at home.
  • Turn down the thermostat in your room. Wear a cardigan in winter and open windows to allow air in summer.
  • Consider walking and cycling instead of riding a car.
  • Medical bills can cost you lots of dollars. So, if you maintain good health, you may be able to save your hard-earned money.

Finally, the festive season leaves most of the people struggling with financial issues as they tend to overspend. However, you should focus on these financial to-dos to create a solid financial cushion in the future.