Many people use the new year as a chance for a fresh start. When it comes to your finances, this is the perfect opportunity to think about changes to your current financial habits. If you’ve struggled to increase your savings or spend less, start the year right with these tips:
1. Keep track of interest rates
Do you know the current interest rates on your credit cards? It’s possible they’ve changed since you last checked. It’s also possible that, if you’re like a lot of people, you just forgot. Whatever the reason, it’s time to check. A high-interest card makes the balance you owe considerably more expensive in the long run. Interests rates are at an all time low, so it might be a good time to do a balance transfer.
2. Stick to a budget
Create a budget that you can maintain every month. New to budgeting? A good rule of thumb is 50 percent of your income goes to essentials, 20 percent is for building savings and paying off debts, and 30 percent is used to cover extras or unexpected expenses. Calculate how much of your income should be allotted for each section, and stick to it.
3. Set financial goals
Set short, medium, and long-term financial goals for the year (and beyond). Whether you want to go to a concert (short), pay off a credit card (medium), or purchase a home (long), start saving a percentage of your income to accomplish your goals.
4. Save your Raise
If you received a raise at the end of the year or think you might get one in the coming months, remember that using it to fund more lifestyle purchases may not be the best choice. Rather than buying more expensive clothes or getting a nicer car, consider putting the extra money into savings instead.
5. Appreciate what you've got
Learning to appreciate what you have will keep you from overspending on things you don't really need. Every day, take stock of at least one thing you own for which you are grateful. Doing this every day will help you maintain a healthier financial mindset.