As the New Year approaches (crazy, I know), I am starting to think about my goals and resolutions for the year ahead. I’m sure I’m not the only one thinking about financial goals. This is why I thought I would share how I’m planning to get my finances in order for the new year. Please keep in mind, I am by no means a financial expert, but I wanted to share some things that have worked for me.
1. Create (and stick to) a Budget
Making a budget is a good idea so you can track where your money is going. You can start out with your income and subtract any expenses. You can also include any other savings or investing goals such as retirement, vacations, etc. The great thing about creating a budget is you can see what you are spending your money on every month and where you might want to revise your spending. You can make interactive budget spreadsheets using Google Sheets or Excel which makes it even more fun to keep track of. Alternatively, if you would rather use an app, check out Mint that connects to your bank account and categorizes your spending habits.
2. Curb Spending Habits
Take inventory of what you have and stop mindlessly spending. For me, whenever I think I need new shoes or a new top, I like to sift through my closet and look at what I already have. If I find I have too many clothes in my closet that I am just not wearing enough, I will list them on Poshmark and get money back in return. It’s a win-win because you can purge old pieces & earn some pocket money. You can even use a platform called Slickdeals which helps you save money while shopping (yes, you heard that right!) Check out more about that here.
3. Understand How Loans Affect Credit Scores
Educating yourself on finances is an important step to getting things on track. If you’re facing debt, such as student loans or credit card debt, it might be time to think about a debt consolidation loan. For instance, debt consolidation loans are loans that offer an amount of money to consumers at a lower interest rate than even your credit cards. Essentially, debt consolidation loans help consumers bundle their debt into one monthly installment payment at a lower interest rate. Some of the benefits include paying off high-interest credit card debt, transitioning from one monthly payment instead of multiple, and the ability to make a lower payment each month when you consolidate with a lower interest loan. For more information on this topic, click here.
4. Start Investing
Make your money work for you by investing in it. Investing is a great way to earn passive income. When it comes to long-term savings, any money you put away for savings should be going into a high-interest savings account. Additionally, if you invest in dividend-paying stocks, you can receive regular payments from the company as a shareholder. Some companies pay cash dividends on a monthly, quarterly, or annual basis and all you need to do is invest. You can start out small too and build your way up. Just remember, the more shares you own, the more money you have the potential to make.
5. Have an Emergency Fund
You’ve likely heard the term ‘rainy day savings’ and this is exactly what you should have just in case. Start putting money away every month into a separate account classified for emergencies only. Things like unexpected dental/health appointments, car troubles, and vet bills can really throw you off if you don’t have money set aside specifically for these situations. Typically, it’s recommended that you build up 3-6 months of expenses so you have money should an emergency arise. I hope these tips helped you. Even more so, if you’re trying to figure out your finances, I hope these help you get your finances in order for the new year ahead.
How are you planning to get your finances in order for the new year? Let me know in the comments below!
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