With a New Year approaching, now is the time to get off on the right foot when it comes to your finances. There are a number of things that you should do in order to get your financial affairs in order and to get the year started right.
Start the New Year off On The Path to Financial Success
To have a good year when it comes to your finances, here are a few key things that you should do:
- Set a budget if you don’t have one and review your budget to update and make changes if you do. It is really important to have a budget in place so you will know where your money goes and so you can make sure that your money is working for you in order to accomplish the goals that you have set for yourself. Dave Ramsey advises that you need a plan, otherwise you will not be able to use your money to help you improve your financial situation since you will end up spending it without thinking about where it is going. If you have never had a budget, sit down and create one while making sure that your expenses don’t exceed your income and that you leave room left for savings.
- Create a plan to pay down the debts that you have. Being debt free is one of the best experiences that you can have since it will virtually eliminate all of your financial stress. If you have a lot of outstanding debts, consider creating a plan to make payments each month and to pay a little more than the minimum so you can start to get the debt repaid. If it is feasible for you, figure out how much you would have to pay each month to get rid of the debt within a year. If you have a lot of people that you owe money to, you can also consider a car title loan from TitleMax.biz. This type of loan is easy to get even if you have bad credit and you can then use the money from the car title loan to pay back those you owe. You’ll have one debt that you can then focus on paying back instead of having a lot of people that you owe a lot of cash to who may be trying to put pressure on you to get some money.
- Set up automatic savings for your retirement accounts. If your employer has a 401K at work, you should think about contributing to it, especially if your employer matches funds (this is essentially free money you are passing up if you do not contribute to the fund). You can set it up so you will have money automatically taken out of your paycheck and put into your 401K and this money will be invested pre-tax which means that it is easier to save a lot. If you are getting a raise this year, think about having the whole amount of the raise set aside to pay into your 401K or other retirement account. Since you have not had that money coming in, you won’t miss it. If you don’t have a 401K, then consider opening an Individual Retirement Account (IRA) to get some of the same tax advantages as a 401K would provide. There are limits set for how much you can contribute each year, but you can put money into an IRA up through April 15 and have it count for the 2013 tax year.
- Check your credit score. This should be done a few times per year, and you should review both your report and your score so you can make sure that here aren’t any mistakes on your report and so you can see whether you are viewed by lenders as a bad credit risk or a good one. If you have bad credit, think about making a plan to pay down debt and make on time payments so you can improve your credit in the future.
- Take stock of your personal financial situation and see where changes need to be made. One thing that you should do every year is review your accounts, your debts and your assets and see where your networth is and where you are having financial trouble. This can help you to identify if you are consistently overspending in any particular area or if there are any changes that you need to make to your relationship with money in order to have more financial success in the future.
Take these steps to get ready for a year of successful money management.
Christy Tomblin is a blogger of many disciplines. Whether it’s personal finance, health, or cooking advice, she’s your go-to resource!