Five Money-Smart Resolutions You Should Make This Year
Many people use the new year as a chance for a fresh start.
When it comes to your finances, this is the perfect opportunity to think about making changes to your current financial habits. If you’ve struggled to increase your savings or spend less, start the year right with these resolutions:
1. Keep track of interest rates.
Do you know the current interest rates on your credit cards? It’s possible they’ve changed since you last checked. It’s also possible that, if you’re like a lot of people, you just forgot. Whatever the reason, it’s time to review. A high-interest card makes the balance you owe considerably more expensive in the long run. Consider transferring your balance to a lower interest rate credit card or consolidate your debts into a fixed-rate loan.
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2. Stick to a budget.
Create a budget that you can maintain every month. New to budgeting? A good rule of thumb is 50 percent of your income goes to essentials, 20 percent is for building savings and paying off debts, and 30 percent is used to cover extras or unexpected expenses. Calculate how much of your income should be allotted for each section, and stick to it.
3. Set financial goals.
Set short, medium, and long-term financial goals for the year (and beyond). Whether you want to go to a concert (short), pay off a credit card (medium), or purchase a home (long), start saving a percentage of your income to accomplish your goals. If you’re not sure which financial goals you should be setting, talk to a Certified Financial Coach at BALANCE.
4. Save your raise.
If you received a raise at the end of the year or think you might get one in the coming months, remember that using it to fund more lifestyle purchases may not be the best choice. Rather than buying more expensive clothes or getting a nicer car, consider putting the extra money into savings instead.
5. Appreciate what you’ve got.
Learning to appreciate what you will keep you from overspending on things you don’t need. Every day, take stock of at least one thing you own for which you are grateful. Doing this every day will help you maintain a healthier financial mindset.
This article was brought to you by Balance, our financial education partner.