By LaTina Emerson, The Shopper Deal Finder

Is one of your New Year’s resolutions to improve your finances? The task may seem daunting, but the beginning of a new year is the perfect time to assess your financial situation, set goals and develop a plan to achieve them. Personal finance experts at West Georgia Technical College and the University of West Georgia offer some tips on how to improve your finances in 2018.

Joey Sanders, an accounting instructor at West Georgia Technical College in Carrollton, teaches a personal finance class and gives the following advice to his students:

Participate in a spending challenge: For at least two weeks, write down every amount you spend and what you spent it on, regardless of how large or small. Bring a notebook or journal with you. Look for patterns. Where is your money going? What are you spending it on? This exercise is usually very eye opening.

Based on the information revealed by the spending journal, estimate how much money you wastefully spend over the course of a month, a year, five years and even 40 years. Here is an example:
• A $3 cup of coffee per day times five days per week = $15
• $15 times four weeks = $60 per month
• $60 per month times 12 months = $720 per year (This accounts for only 48 weeks, so you get the equivalent of four weeks per year to splurge.)
• $720 times five years = $3,600
• $720 times 40 years = $28,800
• If you invest that $60 per month into a retirement fund for 40 years (basically, age 22 to 62) that will earn a 12 percent return and you will have over $712,000. Increase the investment to $100, and it equals $1.1 million.

Establish an emergency fund: If you do not already have an emergency fund in place, work as quickly as possible to accumulate at least $1,000. These funds should not be used for anything other than an absolute emergency.

Develop a budget: Initially, this will be one of the hardest things to do simply because people see budgets as too restrictive. Keep in mind that you’re basically telling your money where to go. The best budget to develop at this point is a zero-based budget. Before you receive your paycheck, designate on paper where every dollar will go. In addition to big expenses (rent/mortgage, automobile, insurance, utilities, groceries, etc.), be sure to include an amount for clothing, saving and items that you’ll need to pay for later in the year. Setting aside a small amount each pay period is much easier than coming up with a large amount at one time.

The budgeting process will be ongoing and require frequent refining, especially initially. Don’t worry if you don’t get it right on the first paycheck. It usually takes about three months before things start to smooth out. Don’t give up or feel discouraged. Stick with the plan.

Work on debt retirement: Personal finance gurus have varying opinions when it comes to debt retirement strategies. Some suggest ignoring the interest rates, starting with the debt with the lowest balance and working aggressively to pay it off, while making minimum payments on the others. Once the lowest balance is paid off, then apply the amount you’ve been paying on it to settle the debt with the next lowest balance. Continue this process until all debts are paid in full. Other financial gurus suggest attacking the debt with the highest interest rate first. Either strategy works.

At the University of West Georgia, Kim Holder, director of the Center for Economic Education and Financial Literacy, and Kendall McCamy, senior financial aid advisor in the Financial Aid Office, offer these financial tips to students:

Create a financial safety net in your life for when uncertainties arise.
The first step to having a financial safety net is starting an emergency fund with three to six months of expenses saved. This removes the stress of day-to-day realities like car trouble, unreliable appliances or unexpected medical bills. The key is to make sure you classify only true emergencies as emergencies.

Set goals to reach your big picture and write them down.
Monthly and yearly goals keep you engaged, but your goals must be S.M.A.R.T., which stands for Specific, Measurable, Action-oriented, Relevant and Time-bound. Write your goals down and put them on the fridge, mirror or any place you’ll come into frequent contact with them.

Manage outstanding debt and avoid future debt to build wealth.
If you have debt, work on aggressively paying it off, while avoiding taking on new debt such as a car note or credit cards. It only takes one financial mistake to derail all the progress you’re making. Avoid asking “How much down?” and “How much per month?”

Plan for uncertainties by purchasing insurance.
Protecting your wealth is as important as growing it. Avoid unnecessary financial strain beyond what your emergency fund can handle by purchasing insurance. Insurance is relatively inexpensive and will help you sleep better at night because it decreases your risk.

Allow compound interest to work for you by investing for the long term.
Einstein once called compound interest “the eighth wonder of the world.” Investing $50 per week from age 22 to age 65 can create a million dollar nest egg. We tend to think in linear terms (5+5+5), but compounding interest works exponentially (5x5x5). Harness this exponential growth over decades.

Stay on track! Slow and steady wealth requires focus and patience.
There are millions of investment “opportunities” out there, but only you know what’s best for you. As your wealth grows, maintain sound judgment and discretion to avoid traps. Even when markets fluctuate, stay consistent.

Ask for help from professionals when you don’t understand.
No one knows everything there is to know about wise investing, and that’s okay. When you’re not sure what to do or have questions about how to manage your money, contact a professional.