Keeping Your New Year’s Resolution
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If you’re like many people, the first thing on your New Year’s resolution list is usually to stick to a budget and save money. Somehow or another, life happens and despite your best efforts it doesn’t pan out. Well, it’s time to get real and make this year the year nothing gets in your way and derails your commitment in pursuit of better money management.
Creating a budget for life and shopping smart
Budgets come in all forms but they all use the same concept of listing your monthly bills like your mortgage or rent, utilities, personal loans and credit card payments, and their due dates on one sheet of paper. Then you’ll compile another list on a different sheet of paper that includes your monthly household, school and job expenses. These are items that have a lot of wiggle room and during a tight month, this is the area you’ll need to trim costs to stay on track. For instance, you may want to keep your high-speed internet, in which case it’s best to find the best available price for your speed in your area.
Make payments on time
If you’ve been late a few times on your utilities or your cable bill, you know all too well that they add a late fee. If you receive a few of these during a month on various bills you’ll pay $20, $30. or more extra. Add this money up over the course of a year and you have new shoes for the family. The same goes for your mortgage and credit cards.
In addition to a late fee, your credit card company may also increase your interest rate and that can cost you hundreds of dollars in just one year alone. Instead, make every effort to get all your bills paid at the beginning of the month. It’ll take a few months to achieve if you’re just beginning and your bills are paid week to week.
Make small sacrifices to achieve long-term goals
If you are currently living paycheck to paycheck you may think getting your bills paid up within the first week of the month is not achievable. But, it is. It’s a slow process that you can do rather quickly by giving up a few extras for the short term. Things like your morning coffee ordered out, buying lunch instead of brown bagging and eating out once a week. Cut items like these out of your monthly budget and before you know it you’ll have all the money you need to get them paid early. This will not only eliminate the stress but, it will also make you appear better to a credit card company, helping to raise your credit score.
Before heading out to the grocery or retail stores make sure to shop around to get the best price on everything. Many grocery, pharmacy and retail stores now have apps that you can download. These apps often have special sale dates, coupons and their weekly ads. By checking their flyers and planned specials first, you can get the items you want for less. Also, if there’s a big ticket item you want, save up for it. This way you won’t pay interest and increase your monthly payments.
Know Your credit score
Having a good credit score is very important. It can literally save you thousands on buying a car, obtaining a home equity loan and a mortgage. Paying your bills on time will slowly improve your score. In addition to timely payments, it’s also important to use your credit cards wisely. If you need to make a purchase that’s unavoidable then pay more than the minimum payment due each month. Having a high balance (anything over half the credit line) will work against you and actually reduce your credit score.
Make this coming year your time to get back on track. Save up for the wants and focus only on what you need. You’ll be pleasantly surprised at how quickly you can and will achieve your resolution.
Photo courtesy of: PublicDomainPictures
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