This new year many Americans made — and some have probably already broken — resolutions to get to the gym more or start eating healthier, but financial health can be just as important.
Financial expert and author of “Everyday Millionaires” Chris Hogan shared his advice for getting into financial health in 2020 with FOX Business’ Lauren Simonetti on “Mornings with Maria.”
The first step, according to Hogan, is to set up a plan and to stick to it. He added that an individual’s financial plan has to be established as a habit.
“Whether that’s sitting down and beginning to budget — telling your money where to go instead of wondering where it went — it’s a great first step, but we have to stick to it,” he said.
He then emphasized the importance of being specific in the goals laid out. Americans should write down exactly how much they owe in debt and exactly how much money they have, according to Hogan. Then, he recommended tackling debt from the smallest amount owed to the largest in a process he called the “debt snowball” instead of approaching the problem in terms of interest rates.
The average debt of an American household is $136,355, according to a survey done by Nerdwallet in September of 2019.
“Reminders are the way to keep yourself focused," Hogan suggested. "So put some visual sticky notes up. Put something up that’s reminding you that you’re going to eat out less, that you’re going to be more intentional with your money and watch what happens.”
He also recommended getting an “accountability partner” — adding that married people already have one “built in.” An accountability partner is someone an individual can check in with to keep track of progress on their goals.
Hogan recommends a debt-averse strategy for financial planning, suggesting that debt is best used for long-term investments, specifically citing a 15-year fixed-rate mortgage.
“I want people to get out of debt and avoid debt like the plague, but I do want them to invest so they can grow their investments," he said. "So get yourself out of debt, be intentional, then invest.”
Getting into financial shape is not without sacrifice. In order to get serious about money, people will have to give things up, according to Hogan. He recommends canceling subscription services that may not be frequently used and abandoning “fancy coffee shops” on a regular basis.
“We’ve got almost 80 percent of people that are living paycheck to paycheck," Hogan said. "That means one check doesn’t show up [and] we’ve got families that are struggling. So I want 2020 to be the year that we get into perfect money focus.”