It’s a new year and time to turn over a new leaf. While your friends and family might vow to lose weight or read more, you can make it your goal to gain financial stability. 2013 can be your year to take control of your finances, fix your credit and address any other personal finance issues you may have. Commit to improving your fiscal well-being by making these new year’s resolutions:
1. Pay down debt
Aim to reduce your debt or pay it off altogether. This will help you financially as well as mentally by reducing your stress and stopping phone calls from collection agencies. To successfully reduce your debt, you’ll need to make consistent payments each month. Pay more than the minimum to speed up the process and save money on interest. For most people, this requires a budget and altered spending habits.
2. Spend less
Track your spending for several weeks and then find ways you can spend less. Some expenses – like rent, groceries and gas costs – will be relatively set. But you should be able to cut down discretionary spending on items like clothing, entertainment and dining out. This will help free up funds that you can put toward reducing debt or building up your savings.
3. Save more
You should have a goal of putting together at least a small amount of savings, if you don’t have any money already put aside. Have a minimum of three months’ worth of living expenses in an emergency fund. This is in case you lose your job, have unexpected expenses like medical bills or car repairs, or otherwise need cash in a hurry. Even if you already have an emergency fund, it’s never a bad idea to save more. You can put money aside for an upcoming purchase like a home or car, or you can start a retirement savings account for long-term financial goals and tax benefits.
4. Boost your credit
Your credit score can affect important and wide-ranging aspects of your life. A bad credit score can cost you loan opportunities, thousands of dollars in interest and even job offers. If your credit history needs repairing, now is the time to do it. Check your credit reports for free each year, and dispute any errors you find. Then work on improving your finances by reducing debt and consistently making payments on time each month. Your score will start to improve within just a few months of responsible bill-paying.
5. Earn more
Your current wage may be out of your hands, but there are ways you could boost your income. Try increasing your current salary by asking for a raise or putting yourself up for a promotion. You could also look for a new job, and make your salary requirements clear. If you’re really strapped for cash, consider picking up a part-time job or doing work on the side to collect a little extra money. Of course, these goals are all easier said than done. Improving your financial situation takes time and hard work, but it is always worth the effort. A better financial life can set you up for success during rough times, a comfortable retirement and countless other benefits.