It’s official: The New Year is here. What better time to give your finances a fresh start? Maybe you’d like to make this year the year you pay off that high-interest credit card debt or the year that you finally buy a home or bulk up your emergency fund. Maybe you’d just like create a better budget or get your finances a little more organized.
Whatever your goal, you can use these new year money tactics to start the year off on solid financial footing.
- Get ready for tax time – now. Nobody likes income tax season; I get that. But what I don’t get is why folks make things extra stressful by waiting until the last minute to prepare. When you rush, you’re more likely to make mistakes or overlook things – and the last thing you want to do is make a mistake on your taxes. Your tax documents should start rolling in soon (if they haven’t already), so why not set aside some time and get yourself organized? Do you have receipts for business expenses? Did you do any freelance work? Do you have any student loan payments that will affect your income taxes? Even if you can’t get started right now, you can get ready, which will save you some hassle when it’s time to file.
- Check your credit report. If your goals for this year involve anything related to credit or debt, it’s critical that you know what’s on your credit report – and how it got there. You’re entitled to one free credit report a year from the three major credit reporting agencies, and there’s no time like the new year to review them.
Getting a credit report is free and easy – all you have to do is visit each agency’s website, and answer a few questions. Once you get your credit report, review it carefully — and if you see anything fishy, contact your credit card company right away! A strange account or an outstanding debt could be evidence of identity theft.
And while we’re on the subject of identity theft . . .
- Change your passwords. If you bank, shop, pay bills, or do anything finance-related online, it’s important to change your passwords regularly to reduce your chances of being the victim of fraud or identity theft. Just remember to choose your passwords wisely and avoid the really obvious ones like PASSWORD or 12345 (and yes, people really do use these passwords).
Need some help creating a good password? Check out this post.
- Set one or two financial goals. Saving and budgeting are much more enjoyable when you have a goal to work toward. Are you saving up for a big family vacation? A down payment for a house? Write down a goal or two — and remember to track your progress to make sure you stay on track.
- Pay off your credit card debt. Why keep spending your hard-earned cash on sky-high interest payments? If you’re carrying a balance on your credit card, this is a great time to focus on paying your credit card debt off once and for all. If you’ve got a low-ish balance, you might be able to pay it off with a few small adjustments to your household budget – and you might benefit from the careful use of a balance transfer credit card. But if your balance t is on the higher end, you may need to think about a long-term repayment strategy like the snowball method.
If you feel overwhelmed by your credit cards or if you just want some debt advice, consider talking to a debt counselor or a debt management company. Depending on your situation, a debt management plan might be right for you.
- Make a budget – or revise the one you’re currently using. If you have a budget – good for you! Take a couple of hours to review it and see if it’s working. Are there places you could cut more? Are there categories where you’re consistently overspending? The best budgets are adjustable – there’s no reason to have a budget that you can’t really stick to.
And if you don’t have one? Kick off 2016 with a shiny new budget! Check our 50-30-20 budget or smart budget ideas. Whatever budget you choose, just make sure to go back and review it every few months so you know what’s working and what isn’t.
- Pledge to save more and spend less. This is good advice no matter what your financial goal is for this year. How much you want to save is up to you. Try cutting a subscription or membership you don’t use or stop buying coffee on your drive to work. If you’re an impulse buyer, leave your credit cards and extra cash at home before you go shopping – you can’t spend money you don’t have.
If you’re looking for a way to start the year off on great financial footing, you can’t go wrong with these tips. And remember that if you need more advice about debt, budgeting, or responsible credit card use? We’re here for you. Contact the Debt Guru team today for a free debt consultation.
Good luck with your financial goals! And happy New Year from all of us at DebtGuru!