Whether you love resolutions or just the thought of them makes you cringe, there’s no denying that having a blank slate come January 1st is a great opportunity. Whether you’ve been wanting to get to a healthier weight, meditate regularly, or start that volunteering opportunity, it’s a good time to take stock of what’s working (and what’s not). This goes beyond our daily habits, though. It’s also a great time to evaluate the ways we spend our money and how we could do better in this regard. Read on for suggestions on five financial resolutions you can benefit from in the New Year.
- Nix the Credit Card Debt
You know that piece of gum and Gatorade you bought for $3 using your credit card six months ago? Because you haven’t paid off the balance, you’ve now paid $50 for that. Okay, okay, we can’t guarantee that math is totally correct but you get what we are saying. If you’re not paying off the balance on your credit cards each month, you’re essentially paying more for everything you’ve bought using the card. And you’re racking up fees and interest. Sadly, you’re not alone. According to this recent article by The Motley Fool, the average American household is carrying about $16,000 in credit card debt. Yikes.
By all means, if you’ve got a card that’s giving you amazing airline miles and you’re able to pay off the balance each month, carry on. If not, though, it’s time to think about ways to pay off these balances. If worse comes to worse and the balances are significant, you might consider borrowing the money from someone to stop the bleeding. If the terms are clear and you know you’re good for repaying this money, it’s a good way to keep yourself from drowning in your own credit card debt.
- Create and Adhere to a Budget
Many of us live beyond our means, but that doesn’t mean deficit spending is okay. If you haven’t tried to budget well in years past, make 2018 the year you create one and stick to it. Use financial reporting software if not a simple excel spreadsheet to keep track of what your monthly bills are versus what you are bringing in. Make sure you leave some wiggle room for miscellaneous expenses that will inevitably arise. What will be interesting is that if you are diligent about entering what you’re spending your money on, you’ll quickly start changing habits that aren’t serving you … such as that expensive Starbuck’s latte-a-day habit. Even better, you’ll be more likely to put any leftover funds into savings.
- Secure That Safety Net
Remember that “wiggle room” we talked about earlier? A shocking amount of the population does not have any sort of emergency fund. The thing is—emergencies happen all the time. If you don’t have a financial safety net in place for sudden employment, health issues, and more, you could find yourself out on the streets before you know it. You might think this is an exaggeration but these things do happen to “people like us” every day.
- Don’t Wait ‘Til Tax Day
So many of us dread doing our taxes so much that we procrastinate until the very last moment in April. This usually means a rush job done by ourselves or by someone else and that’s never a good thing. Take the time to get to know what tax benefits you qualify for and how you can use deductions to your advantage. If you’re not diligent about this, you’re likely to leave money on the table … and possibly a lot of it. And if you’re still dealing with the downfall of your procrastination from last year, you can get tax relief help from Community Tax.
- Start or Up Your Saving
The idea of living off social security is just that—an idea. Sadly, it’s no longer an option so saving your money is a must. Whether you’re skipping those daily lattes and are just getting your start in this realm or you are diversifying your portfolio, saving at least a portion of what you make is a must. This is particularly true if you want to be able to retire at some point soon. If you’ve already been saving and investing for your sake and the sake of your family, decide that 2018 is going to be the year that you up the percentages you’re putting into these funds.
These financial resolutions for the New Year don’t have to be drastic. A step in the right direction is always a good thing, so if you do your best to tackle at least one of these goals, you’re on your way.
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