If your New Year's resolution is to get out of debt or save more money in 2016, we want to help you get there. Consumer expert Amy Davis explains five things you can do to get financially fit in 2016.
The first step is simple. Be specific about your goal. Instead of saying, "I want to save more money," be clear. "I want to save $3,000." Then you make a plan to get there.
Step 2: For one month, write down every penny you spend. Everything gets noted: your rent or mortgage, insurance, gas, groceries even what you paid for lunch. Then you'll know where you can and can't cut back.
Step 3: Make a budget. One financial adviser recommends the 50-30-20 budget. No more than half of your take-home pay going to must-haves, like your mortgage, utilities and groceries. You can spend 30 percent on wants, like new clothes. The remaining 20 percent should go into savings.
Step 4: Give yourself one task each week that will help you save or make money. You can start by shopping around for cheaper car insurance.
The next week, try to lower your cell phone or cable bill. On week three, gather up things you no longer use and sell them online.
Step 5: Build an emergency fund. When you're living paycheck to paycheck, one minor emergency can knock you off the path towards your financial goal.
Start by saving just $1 a day for the first month. The next month, save $2 a day, then increase until you have six months of living expenses.
The key to saving and having enough to pay off debt is making a plan and doing things that constantly remind you of that plan. For example, studies have found that carrying and using cash only instead of a credit card will make you spend less. It's believed that actually handing over money instead of a piece of plastic makes us think more about purchases you may not need.