Your Step-by-Step Guide to a Wealthier 2018

A roll of $100 bills coming off the printer.

Among individuals with a problem to solve, around half were successful if they made a New Year's resolution compared with a 4% success rate among non-resolvers. If you want to boost your chances of achieving lasting change, the start of the New Year is a great time to do it.

Of course, knowing where to start if you want to get richer in 2018 is a daunting prospect. The good news is, you don't have to create a roadmap to prosperity on your own. Just follow these seven steps and you're almost certain to improve your financial circumstances, and end the year a little wealthier.

1. Put pen to paper

Almost 90% of Americans have some type of financial goals they want to achieve, according to a 2017 Nerdwallet study . If you're one of them, start by writing your goals down to significantly boost your success rate.

When you write down your goals, be specific. Don't just say you want to save more: specify you want to save $5,000 by year-end. Have a timeline, and make your goals measurable. Then, look back throughout the year to track progress.

2. Optimize your spending

Six in 10 Americans have no budget . Since most who don't have a budget underestimate their spending, now's the time to become one of the 40% with a plan. This could be as simple as budgeting to keep spending to 80% of your paycheck , or as complicated as allocating every dollar to spending and savings categories. The key is to find what works for you and stick with it.

It's also a good idea to find out exactly what you're spending cash on. Tracking your spending for a month will give you a handle on problem areas, and there are apps that make that easy. Celebrate the New Year by installing Mint or Clarity Money on your phone to find out where your cash is going, and check your accounts for recurring expenses, like memberships you don't use that you can cancel.

Because you'll definitely still be spending at least some money, now's also a great time to start getting rewarded for things you buy by making sure you're using the right rewards card based on your spending .

3. Take charge of your debt

If you have high-interest debt, paying it off will definitely make you wealthier. To do that, check your credit report and account statements. Find out the total you owe, how long it will take to repay, and how much it will cost to repay under your current repayment plan.

Then, check your budget to see if you can make some extra payments. If you owe $5,000 on a credit card at 14% interest and make minimum payments of $100 monthly, you'll take 76 months to repay the debt and spend $2,548 in interest. If you bump up your payment by just $50 monthly, you'll shorten repayment time to 43 months and lower interest costs by $1,179, to $1,369.

If your interest rate is high, consolidating debt could help repay your loans for much less. Lets say you owe $5,000 at 14% and $3,000 at 17%. To repay both in two years, you'd need to pay $240 and $148 monthly, respectively. If you consolidated both cards at 9% using a personal loan with a two-year repayment period, you'd lower your monthly payment from $388 to $365 and save $549 in interest.

4. Boost your savings

Other than winning the lottery, there's only one real way to get rich -- saving money. Unfortunately, 60% of Americans don't have even $500 in savings, and the median retirement savings for all American families is just $5,000.

To end 2018 with more wealth than you started, bump up your savings rate now. Even a little bit makes a big difference. If you're making the median salary of $51,272 and contributing 6.2% to your 401(k)-- the amount Vanguard found most 401(k) participants contribute -- increasing your savings by just 1%, or around $500 annually, could make a big difference. This chart shows how much $500 more in a 401(k) in 2018 would be worth when you retire, depending upon your current age.

Calculations by author.

5. Make autopilot work for you

Around 1 in 6 Americans responding to a Bankrate survey said they aren't saving because they haven't gotten around to it. If you want to get wealthier in 2018, make your natural inertia work for you.

Starting January 1, tell HR to increase automated 401(k) contributions by 1% or more. You'll quickly adjust to living on a little less, and you're unlikely to change the contribution amount if you must fill out paperwork to do so.

While you're at it, set up an automated transfer from your account to a savings account when your paycheck hits. If you're paid biweekly and transfer just $40 per paycheck, you'd have over $1,000 saved by year's end.

6. Tweak your taxes

Giving more money than necessary to the government is not the path to prosperity, so in 2018, make sure you're taking advantage of every possible tax break. This means stepping up investments in tax-advantaged savings accounts , and finding out if you can claim credits for changing life circumstances -- like moving or having a baby -- that could slash your tax bill.

In addition to optimizing your taxes, 2018 is the year to lower your refund -- not by paying more, but by adjusting the amount being withheld. If you get a big refund, you've essentially given the IRS an interest-free loan, and likely cost yourself a lot of cash.

In 2017, the average tax refund was $2,782, so a filer with the average refund paid around $232 more per month than necessary. If you'd used that $232 to bump up a $100 monthly payment on $5,000 in credit card debt, to $332, at the end of 12 months, your remaining balance would be $1,496.86, assuming a 14% interest rate.

But if you gave the IRS a loan, paid only $100 monthly to your card, and applied your refund at year's end? Your balance would be $4,466.64 before the refund reduced it to $1,684.64. You'd have cost yourself $187 in extra interest by giving the IRS your cash instead of using it to become debt-free.

7. Make your money work harder

Investing more is an important way to get wealthier, but you need your investments to work for you. This means avoiding investments with high fees , choosing the right asset allocation, and not playing it too safe . The start of the year is a great time to check if your portfolio fulfills these requirements.

To decide how to best invest your money, a good rule of thumb is to subtract your age from 110 and invest that percentage of your portfolio in stocks. This would mean that if you're 40, you'd need to invest 70% of your assets in the stock market . Filling your portfolio with low-cost ETFs is a simple and effective way to get into the market and make sure your portfolio is diversified. Just make sure that you understand what you're investing in .

2018 can be your year to get on the path to prosperity

Taking these steps may seem daunting, but if you start early and work your way systematically through making a plan, setting a budget that includes saving and allocating money to the right investments, you'll be on the path to a wealthier 2018 and a richer, more secure future.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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