Among the top resolutions people make when the new year comes around is getting their finances on the right track. The promise of new beginnings and the burden of self-improvement help people look back to a year’s worth of regrets.
Aside from spending more time with family or trying to be healthy, we all certainly have our fair share of vices especially when it comes to money. However, like most resolutions, financially-themed promises for improvement hardly get achieved.
About 45 percent of people make New Year’s resolutions and only 8 percent get to achieve their goals. This means that this does not bode well for hopes of improved money management. Still, these low odds should not deter one from improving financial habits. Here are some tips to make 2017 a great year for your wallet:
1. Pay bills immediately. Everyone has monthly obligations such as insurance, utilities, retirement fund, credit cards, etc. Take care of these obligations immediately after receiving your paycheck, before allowing yourself to spend on any indulgence or luxury. This strategy will help you get a better sense of what you can really afford — and what you can’t.
2. Repay your credit card debt (at least 20 percent). According to WalletHub, an average household with credit card debt will owe approximately $8,400 by the end of 2016. So getting a zero percent balance transfer credit card plus a well-crafted payment plan will help a person save hundreds on finance charges. It understandable that a bigger amount will be difficult to pay off in one swoop, so it is recommended that you start smaller, by making a plan to transfer and pay off 20 percent of what you owe over the course of 2017.
3. Review your credit report and sign up for credit monitoring. It is easy to get free credit scores today, thanks to websites and banks that provide the service. However, knowing your score is just a start. According to a survey by the Federal Trade Commission, one in four people have a credit report containing an error that could affect their credit score. Reviewing your credit report thoroughly can help you spot signs of fraud before they get out of hand.
Aside from checking your credit report, you can also keep tabs by signing up for a 24/7 credit monitoring. This service will enable you to receive notifications if there is an important change to your credit report.
4. Plan for a realistic budget — and stick to it. According to the National Foundation for Credit Counseling, Americans are going to end 2016 with an $80 billion credit card debt. That’s not a surprise considering that only 40 percent of adults have a budget. This is why there is a need to look over what we make and how to spend it.
The first step is to look at past bills and make a list of all recurring expenses. Rank them according to importance, putting real necessities, such as housing, food and health care on top. Then, see what you need to cut out from the bottom list to make sure that your pay exceeds what you plan to spend. Finally, keep track of this list and how you spend every month to make sure you’re abiding by your budget.
5. The possibility of looking for a better job. We want to spend less and save more that sometimes we overlook what could be wrong: How much we actually earn. Finding a better-paying job may not seem to be the better answer as trading up a longtime career for a new one isn’t easy. However, considering a new job with higher wages and/or moving to an area with a lower cost of living can outweigh all other financial maneuverings. Another suggestion is going back to school to acquire skills that can add to your earning potential.
As expected, this needs a little more thinking and planning. The thought of changing jobs and/or moving to a new area may be a little daunting, but change is good — and changing for a better year financially is better. (AJPress)
