It is cliché to say that a New Year means starting fresh and creating resolutions.
If your personal financial situation in 2013 didn’t bode well then a brand new year is the perfect opportunity to get back on track, rejuvenate your budget and start meeting your goals. Here is one takeaway: take comfort in the fact that you’re not the only one having a difficult time in this economy.
In the U.S., total personal debt is just as much as the national debt: $16.3 trillion compared to the government’s $17.3 trillion. More than $13 trillion is mortgage debt, $1.063 trillion has been accumulated in student loan debt and less than $890 billion is credit card debt. All of these are indeed terrifying numbers.
On top of debt, price inflation is running rampant across the country. As Economic Collapse News reported Wednesday, 10 common things are becoming more expensive this year, including rent, public transportation, healthcare, taxes and mail. This doesn’t seem to help any household’s budget, but Americans adapt and don’t use any excuse to meet their objectives.
With that being said, here are 10 tips to get your financial situation back on track this year:
Sit down, grab a coffee and look through all of your pay stubs, read your financial statements, peruse your budget and study your spending habits. By doing this, you will ensure that you completely understand your finances, how much you earn and save and where you’re allocating your money. Obviously, if five percent of your monthly earnings are going towards ordering pizza then that needs to change.
If your 2013 budget didn’t go as expected then consider creating a new budget for 2014. Also, try to keep track of your budget on a regular basis, such as spending an hour a week or a month to write down how much you earned, spent and saved. This further allows you to meet your financial aims.
Pay Down Debt
Paying down consumer debt is hard to do, but it’s not impossible to complete. Once you have a full total of how much debt you have try your hardest to pay it off and schedule a timetable. Once your credit card debt or line of credit is paid off then you can focus on saving and investing.
A lot of the stuff we have we don’t really need. Who actually needs an ultimate VIP cable package, a top-of-the-line data plan for your smartphone and a weekly visit to the movie theater? No one, that’s who. Try to cut back and live within your means and you’ll realize you didn’t really need the stuff you had. How many people have cut the cord and don’t miss a single minute of television?
Essentially, living beneath your means will prove to be a worthwhile endeavor.
This is definitely easier said than done. If you don’t earn enough money to maintain your standard of living then consider these tips: get a part-time job, start freelancing, create an online business and/or look for temporary employment opportunities. A few hours there, a couple of here will do wonders in the long run.
Ask yourself this question: how much do I want to save this year? It’s a difficult question to answer because there are so many variables. However, the rule of thumb is to save 10 percent of your income. If you save less than that every year then reach for that figure – it would be even better if you surpassed that number.
Increasing Savings (2)
There are a variety of dependable methods to make sure you’re saving more money. One of them is signing up for an automatic savings program that transfers $25, for example, from your checking account to your savings account every month. Another is signing up for high-interest savings accounts, such as ING Direct, in which you’ll receive more money at the end of the month.
Look at Investing
Are you interested in earning more than just 10 cents a month on your savings account? Then start doing some research as to how you can begin to invest and put some of your money into the stock market. Although the stock market can be volatile, by reading up on experts like Peter Schiff, Jim Rogers and Marc Faber, you’ll be a lot safer then listening to the talking heads on CNBC.
Rewards Credit Card
Indeed, this might seem counterintuitive, but if you have a strong will then a rewards credit card can work for you. For instance, if you sign up for a rebate rewards credit card and you spend about $250 per month (paying the full amount every month) using the card then you could get back free money by the end of the year.
Having savings and maintaining an emergency fund are two completely different things. A savings account is for medium- and long-term planning, while an emergency fund pays for the unexpected, unforeseen events without having to dip into your credit card or, worse, seeking a payday loan. Begin to build one today.