Well tax season is over for most people, but some are already getting an early start on next year’s taxes. It is the perfect time for you to think about making some changes in your financial situation and start fresh for the next year. Here are 5 resolution-worthy ways to help you get your finances back on track.
Resolution #1: Vow To Stop Spending Like You Have Millions of Dollars
Realizing that you are spending way more then you bring home is a big step in recognizing – and dealing with – a financial weakness. Take the time to sit down and document how much money you bring in and how much is being spent and on what. Sound like a budget? It is.
Once you have determined your incoming and outgoing figures, compare the two totals to see if you have any left over. If you are short on the paycheck end of things, find ways to make the two mesh together. This can be as easy as consolidating monthly credit card debt or cutting out unnecessary items. If you keep spending more than you make, you will never get ahead and your future choices will be very limited.
Resolution #2: Stop maxing out Credit Cards
Having credit cards can be a good thing if you use them correctly. You should be charging only what you can pay off in a month’s time (excluding emergency situations). This means that you should not be going out and using your credit cards like there is no tomorrow. Instead, limit yourself to $50 dollars a month on credit cards, unless of course you are already working at paying them off, which in case – good job! This will make it easier to pay off your cards each month.
Also keep in mind that credit cards usually have high interest rates and if you are only making the minimum payment, then you are only paying off the interest that you credit cards have accrued. This means that your overall balance really does not change, especially if you continue spending. Are you using credit cards to purchase daily necessities? If so, this is a financial warning sign. If you feel your debt situation is spiraling out of control, it may be helpful to consult with a financial advisor to get your debt back under control.
Resolution #3: Save Money
Take stock in how much you have in your savings. Do you have a retirement fund set up? If not, now is the perfect time to consider doing so. Remember to pay yourself each month out of your paycheck after paying the bills. Take this money and put it into a savings account or a retirement fund. Savings accounts will give you that extra cash as you need it for emergencies and other expenses that crop up throughout the year. A retirement account will make sure that you have money during your golden years when you no longer generate the income you would while working. It a good idea to have both a savings account and a retirement fund as it will help you to secure your financial future.
Resolution #4: Pay Off any Overburdening Debt
If you are like millions of other people, you probably have several credit cards or other loans that are costing hundreds of dollars a year in interest rates alone. Take the time to consider your available options such as debt management, debt consolidation and others that will help you ultimately pay off all your debt. A debt consolidation plan may save you some money in interest fees while other plans focus on paying one card off at a time.
Also, avoid any late fees or over the limit fees as well. These can mount up and tack on an extra $100 dollars per card. Make this the year to become debt free. However, don’t get rid of all credit cards as it is important to keep record of your credit history. Make sure to keep one or two open, but don’t spend more then you can pay off at the end of the month.
Resolution #5: Amend Your Purchasing Habits
How do you change the way you buy? One way is to make sure that your purchases are absolutely necessary. They should fall into the need category not the want category. Also, whenever you can, make purchases in bulk or use a coupon. This will definitely save you some money off of necessity items. By sticking to a spending budget, you will have extra money to put into a retirement fund or a savings account. Remember that this does not mean that you can’t have fun and make purchases just because. However, don’t deprive yourself completely and be sure to save your money for those things that you want.
You will appreciate it all the more and save money to boot.
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