Okay, so we could all use a little help when it comes to getting our finances in order. It’s always a struggle. But two words: New. Year. It’s time to makes some changes that could potentially keep you from getting overwhelmed.
Keep a budget.
It is seriously important to keep a budget and stick to it. A good budget is the foundation to financial security. Take as long as you need to work on it. Don’t get frustrated with yourself.
Gather up all of your income information. Then, your expense data. Pay attention to the details and be thorough. You don’t want to miss anything. Use a budget worksheet to understand your inflows and outflows. If at first you’re overwhelmed, don’t worry. That’s why you’re creating a budget. You can see exactly where your money is going. Make sure you’re making as much money as you’re spending.
Don’t just tell yourself to spend less money. Instead, for example, cut fifty dollars off the grocery bill. How much less should you be spending? Where do you want to cut from? Where can you cut from? Perhaps plan meals ahead.
Thirty percent of your budget should go to housing and debt. Twenty-six, on living expenses. Twenty-five, taxes. Fifteen, savings and retirement. Four percent, insurance. Feel free to research budget allocation and definitely find what works for you.
When you run into any unexpected income, divide it into three. Spend one third to pay down those credit cards. It doesn’t even matter if it’s ten dollars. Just do it. The second third should be put into savings, or in an investment. Keep it for the future. The final third should be a treat, or a personal improvement. It’s a good plan, we’d say!
Come what may.
You know what’s the worst? Having to get your car repaired all of a sudden. Gosh, or an emergency root canal. However, keeping a slush fund could keep your monthly budget from getting offtrack. Monitor all of your expenditures in a month and multiply the total by three. That’s the smallest amount you should have on hand. Trust us. Keep a stash in an account on hand. Consider getting a money market account.
Jay Fine, a financial planner in New Jersey believes in, “putting yourself on the payroll. Every month–or even better, every paycheck–make sure you set an amount aside for investment. A good number would be about six percent. Anything more would be great. If you have to, you can even write yourself a check to deposit or send to another account. But just as you pay your mortgage and your electric bill without fail, now you’ll be making sure to pay yourself as well.”
Pay extra on mortgage.
Go ahead and pay an extra payment or two toward that mortgage to start the new year right. You can chop off some time and the amount it will take you to pay off your home, duh. However, it can reduce your interest too. Since most mortgage interest rates are lower than credit cards, consider dealing with those first.
Earn a little extra too.
A little profitable hobby like photography can perk up your budget. Take up a new pastime to enjoy and to invest in. It’ll teach you something new about yourself, and give you a little spending money to keep around.
Another idea worth consideration is sending out a resume. So you’re not actively looking for a better job, we know. However, if you feel like you deserve better, put your money where your mouth is and send out five resumes per month. See what comes your way. You might just find that higher salary. Attend networking events while you’re at it, and connect with potential employers on social media. It may help to ask you boss for a raise. See what works for you.
A little bit a month.
Sure, we all want to pay off debt. Don’t just say that. Set a number. Pay off $150 of debt each month. That equals $1,800 a year. Play around with those numbers, but make an end date and have a dollar amount. The goal ought to work well with your personal financial situation.
Other resolutions to consider…
We know you know. It’s difficult, but it’s also difficult on your bank account. A study by the American Lung Association says that smokers noted “saving money” as the top reason to quit smoking.
You can even save more money by reducing the amount you smoke. On a national level, someone who smokes a pack a day could be spending as much as $3,650 a year.
Making this decision could save you the incurring costs of dry cleaning, dentist records, and medical bills. It could lower your insurance premiums. A smoker pays fifty percent more on life insurance, according to the past president of Scott Leavitt Insurance & Financial Services, Scott Leavitt.
Believe it or not, you WILL save money if you get that gym membership. Americans spend around $7,800 annually on health care, says National Association of Health Underwriters. In addition, eating right and exercising three times a week for at least twenty minutes they can see a 70 percent decrease in prescription costs and a 30 percent decrease in medical costs, according to Scott Leavitt.
A healthy lifestyle can improve diabetes, high blood pressure, high cholesterol, and heart disease. Some patients–with their doctor’s guidance–can go off of medications, or cut the medication down. It’s no laughing matter.
Food, especially quality food, can be expensive. For $2.59, you could get a bag of potato chips; or, you could buy four pounds of potatoes which at least have more vitamins and fiber. Think about it.
Knowing how to buy groceries efficiently can really affect how much money you have the next time you go to the grocery store. Examine what you could buy in bulk, and what needs to be bought in small amounts to keep fresh.