What’s your money story? As one year draws to a close, with a brand new year on the horizon, many are already dreading the financial hangover that will greet them when the bills for holiday shopping and spending come due.
“We call this the most ‘won-debtful’ time of the year,” says millennial money expert and MyFabFinance.com founder Tonya Rapley, “because most people accumulate their debt during the Christmas season.”
Rapley, dubbed “the new face of wealth” by Black Enterprise in 2014, created My Fab Finance to help millennials break the cycle of living paycheck to paycheck so that they can become financially free and do more of what they love. Rapley offers valuable advice for those who want to leave past poor financial choices—including holiday overspending—behind, and create a fresh, new money story for themselves. Consider her recommendation of five steps to leave old money habits behind and position yourself for a fresh start in the new year.
Don’t carry a negative money story into the new year.
“It’s important to realize that what happened this year, the money mistakes that you made, you don’t have to make next year,” says Rapley. “A lot of people allow their financial baggage to weigh them down, so that it affects their self-esteem, they feel hopeless, and they think, ‘What does it even matter? Why should I even get back on track financially?”
“But the good thing about money is that you can literally create a new money story next year. People need to remember that, because one of the biggest things I see people do is count themselves out because of the past money mistakes they made. Those mistakes aren’t the end of your story, and you can rebuild after them.”
Get clear about your financial situation.
“Getting clear means sitting down and assessing your entire financial picture: Here’s how much debt I have. Here’s what I have in savings. Here’s what my credit score is. Here are what my goals are. This is my investment portfolio.”
“You might be strong in investing, but you might need to boost your savings a little bit, or it might be time to tackle your debt. Especially if you’re accumulating debt over the holiday season, you need to create a plan to eliminate that, so you’re not paying this year’s holiday season debt during next year’s holiday season.”
“We’ve created a wonderful checklist at My Fab Finance for people who are like, ‘I don’t know where to get started,’ that can guide you through what you should be thinking about.”
Commit to doing something different.
“You want to think about the small things that you can do differently,” says Rapley. “It could be as simple as ‘I’m going to take a different route to work, because there’s a Starbucks on that route, and I always stop [to spend money] at Starbucks.’ What are you going to do differently to increase your bottom line, bring more money into your household, but also to maintain your savings, grow your money, and allow your money to work for you? Maybe it is picking up a side hustle or part-time job at the top of the year.”
“So, we’re assessing where we need to go financially. Now we need to make a decision and determination of what are we going to do to get to where we need to get to, and what are we going to do differently from last year so that we don’t get the same result.”
Focus on healing your relationship with money.
“Understand your money story, and what has shaped and informed your relationship with money,” Rapley recommends. “Make a commitment to yourself to heal that money story, because a lot of us are carrying around financial baggage from our childhood, things we experienced with our parents.”
“For myself, graduating from college during a recession, I resented jobs and I resented money, because I felt I did everything right and I was still not in the financial position that I wanted to be in. [Moving forward] required me to heal my thoughts and heal my attitude about money.”
Achieve small goals to create a winning mindset.
“Put yourself in a position to win. One of the biggest boosters is achieving a victory for yourself,” says Rapley. “They don’t have to be big, audacious goals; it could be ‘I’m going to save $25 a week.’ Once you begin to achieve your financial goals, psychologically, something begins to click. You get the mindset of a winner, as opposed to that of someone who is struggling or losing.”
“Really focus on small victories so that you can boost your own morale. Don’t look for others to be your cheerleader and your champion. Find ways to create success in your life and your finances, so that you can be your own champion.”