3 Ways to Improve Your Financial Life in 2019

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If "Get my financial house in order" is on your list of New Year's resolutions, you're not alone. According to Fidelity Investments' 10th Annual New Year Financial Resolutions study, 32% of respondents say they are considering making a financial resolution for the year ahead, compared with 27% last year -- an all-time low.

Why do 80% of resolutions fail by the second week of February? Resolutions are all about self-improvement, and managing money is one obvious area where many people can do better, but often don't know where to begin. Setting achievable goals based on where you are now will help you stick with your plan long after January.

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Fidelity found that Americans have the same top three resolutions for the 10th year in a row: Save more (48%), pay down debt (29%), and spend less (15%). Given that 40% of U.S. adults don't have enough money saved to cover a $400 emergency, and the average American household carries $137,063 in debt (according to the Federal Reserve), it's no wonder these key money goals consistently rank at the top of the list every year.

If you've resolved that 2019 is going to be the year you whip your finances into shape, consider these tips on how to keep your resolution on track for the entire year.

1. Spend less and save more.

If you wanted to lose weight, you'd consume less food and exercise more. Similarly, achieving financial fitness means reducing your spending and bulking up your savings.

Developing a written budget and making sure every dollar has a purpose is one of the best ways to get your spending under control. Write up a budget for the new year after tracking your spending for 30 days, a research strategy you should use to guide your spending plan.

Next, work on fixing poor day-to-day spending behaviors and habits, such as impulse buys, paying unnecessary fees, or shelling out money for services and subscriptions you don't use (when's the last time you actually saw the inside of your gym?) Ask someone to be your accountability buddy, like your spouse or a friend. Personal finance apps can keep you accountable by tracking your spending and identifying areas to cut back. You can also institute a 24-hour "cooling off" period before making purchases over a certain dollar amount -- $100, for example.

The flip side to curbing your spending is building up your savings. Again, start small. If you've never saved a dollar in your life, consider setting aside $5 or $10 a week at first. Pick a number that's doable, so you can hit your savings goal even if you get hit with a large and unexpected expense during that month. As your savings account (and your confidence) grows, review it monthly. Once you hit your savings goal consistently, increase that target. Rinse and repeat every few months, and before you know it, you'll have formed a consistent savings habit.

Implementing no-spend days or weeks -- along with putting yourself on a cash diet for certain categories, like groceries, dining out, and entertainment -- are also great ways to control your spending and save additional cash.

2. Boost your retirement account balance.

Setting aside additional savings for retirement is easier than you think, and you can usually do it without making any significant sacrifices. The contribution limits for 401(k) plans increase by $500 to $19,000 in 2019, so now is a good time to bump up your retirement plan withholding to build your savings all year long (and people older than 50 can contribute more to catch up). Someone with a $50,000 salary would only have to increase the contribution by 1% to save an extra $500 for the year.

What's more, your company 401(k) is one of the easiest ways to invest. Typically, workplace retirement plans offer a variety of investment options to choose from, depending on your appetite for risk and how long you have until you retire. What's more, you can have the money taken out of your paycheck and deposited directly into your account.

And if your employer offers a match, make sure you put enough into your retirement plan to get them. It's one of the fastest and simplest ways to increase your retirement savings. For example, if your employer puts in $0.50 for every $1 you contribute to your 401(k), saving $1,000 would net you an additional $500, thanks to the match. If you plan to leave your job soon, pay careful attention to your employer's vesting schedule, which determines how much of the match (if any) you can take with you when you go.

And if you get a raise or a bonus in 2019, consider putting aside some of that additional income for retirement. Redirecting half your raise to your retirement account will lower your current tax bill, increasing your paychecks while helping to build your nest egg.

3. Invest to grow your wealth.

You work hard for your money -- why not put some of it to work for you? One of the best ways to do that is by investing. You don't need tens of thousands of dollars to get started -- some investing platforms let you open an account with as little as $50 or $100.

When it comes to investing in the stock market, low-cost index funds are a smart way for newer investors to get started. Index funds are designed to mirror the performance of a particular market index, like the Dow Jones Industrial Average. You don't have to spend time researching and picking individual stocks, and your portfolio's performance won't be overly dependent on any single company. Billionaire investor Warren Buffett is a big fan of index funds -- he claims they're among the best ways for Americans to invest their money.

According to Fidelity, 87% of Americans are feeling positive about their financial situation, and three out of four say they'll be better off financially in 2019 than they were in 2018. Still, most aren't on track for retirement -- in fact, around half of U.S. households have no savings for their post-work years at all. So regardless of our optimism, clearly, there's always room to grow when it comes to improving our finances. Follow the advice for pursuing each of these three resolutions to develop good spending and savings habits you can stick to. You'll not only improve your finances in the coming year, but for the rest of your life.

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