4 Easy Ways to Get Richer In 2018

The new year is a great time to start practicing better financial habits. Implementing good money habits  and comitting to keeping them up throughout the year will make you richer by the end of 2018 than you were at the start.Read on to learn just how much adopting these habits can enrich you throughout 2018.

1. Increase your 401(k) contribution by 1 percent: End 2018 with nearly $1,000 more

You are certainly aware of the importance of saving for retirement. Putting money aside when you are young will allow compound interest to do its magic and provide you with a comfortable retirement. In addition, if your employer matches some of your contributions to your retirement account, you can increase your retirement nest egg that much faster.

But if you already feel financially squeezed, you might assume that it's not worth the trouble to put aside the little bit extra. That is simply untrue. With just a 1 percent additional contribution to your 401(k), you could end 2018 almost $1,000 richer than if you'd instead blown that money on something frivolous.

Here's how. The average full-time wage and salary worker in the U.S. currently earns $44,668 per year, according to the Bureau of Labor Statistics. Let's say that's your salary. That means increasing your savings rate by 1 percent would add $446 more per year to your retirement account. And since $446 over 12 months is only going to result in $18.60 deducted from your bimonthly paychecks, it's unlikely you'll even notice the difference.

If your employer matches your contribution and you have not yet maxed out the matching amount, that $446 will magically become $892.

The average rate of return for 401(k) plans ranges between 5 and 8 percent per year. If we assume an 8 percent return on the investment of $892, that's $71.36 in growth for 2018 alone. So for a mere $18.60 per paycheck, you might end the year $963.36 richer.

And even if you are not lucky enough to have employer matching — or you've already maxed it out — you could get the same result by increasing your 401(k) contribution by 2 percent. That would still only "cost" you $37.22 per bimonthly paycheck, and result in nearly $1,000 in additional wealth by the end of the year. 

2. Reduce how often you dine out: End 2018 with $900 more

According to a 2016 Zagat survey on American dining, the average person eats a restaurant- or commercially-prepared meal 4.5 times a week. All that dining out adds up. The Bureau of Labor Statistics found the average American household spent $3,154 on restaurant dining in 2016.

If you cut out one restaurant meal per week in 2018, you can end the year $455 richer. Cut out two meals per week, and you'll have $911 more in your pocket.

Here's the math. The Bureau of Labor Statistics calculates that the average American household spent $4,049 in 2016 on groceries. Assuming those households are dining out 4.5 times per week or for 234 meals per year — we can figure out exactly how much you save by brown bagging your lunch or eating at home.

Presuming you eat three meals a day, seven days a week, 52 weeks of the year, there are a total of 1,092 meals to account for in the year. If you're eating 234 of those meals at restaurants, you are spending $4,049 per year on 858 meals at home (1,092 meals total - 234 restaurant meals = 858 meals at home). Now, $4,049 divided by 858 meals comes to an average cost of $4.71 per meal.

If you're spending $3,154 on 234 restaurant meals per year, you're spending an average $13.47 per meal ($3,154 / 234 meals = $13.47). That means you're saving $8.76 per meal whenever you eat at home rather than at a restaurant ($13.47 - $4.71 = $8.76).

Let's say you reduce your dining out by one meal per week, or 52 meals total. That will save you $455.52 total ($8.76 x 52 = $455.52). Reduce your dining out by two meals per week, or 104 meals total for the year, and you'll save about $911.04 ($8.76 x 104 = $911.04).

3. Send an extra $100 to your credit card each month: Save more than $1,000 in interest

According to ValuePenguin, the average indebted household carrying credit card debt owes $10,955. According to CreditCards.com, the average APR is 16.15 percent, which works out to 0.013 percent per day. This means the average household will pay $3,675 in interest over the life of the loan if they make the minimum payment of 3 percent (or $329) per month, and it will take 45 months (that is, from January 2018 all the way through to October 2021) to reach the payoff date.

But if you send just $100 more to your credit card per month, you'll save $1,117 in interest, and cut a full 13 months off your repayment schedule. You can achieve this by simply putting an additional $50 from each bimonthly paycheck toward debt repayment. That would also help you reach debt freedom a year earlier. 

4. Do more with your tax refund: End 2018 with nearly $6,500 more

If you're like the average American, your tax refund in 2017 was around $3,050. But too many people fritter that money away. While it's certainly exciting to get a payday from Uncle Sam every tax season, you could be doing much more with your money than blowing it as soon as the IRS check clears.

Let's say you file your return in April and get your refund in May. If you put that $3,050 into an index fund by June and it earns 8 percent interest, you'll have $3,195 by the end of the year. That's $145 in earnings.

In addition to that, you decide to change your withholding in January 2018 so you're not giving the IRS an interest-free loan. You keep $254 more from each paycheck ($3,050/12 = $254), and invest it in that 8 percent index fund. By the end of the year, you'll have earned $135 in interest, for a total of $3,183.

All together, your savings and interest add up to $6,378 for 2018. That's a hefty boost to your long-term financial security in exchange for saving the tax windfall you would have otherwise spent