4 Ways To Manage Your Money in 2016
Welcome 2016! Most of you have made resolutions for the New Year and have wonderful intentions of sticking to them, however for whatever reasons they don’t last long. But when it comes to your finances, you should make some long-lasting resolutions that are consistent and have you proud of your credit score. Now a lot of people start the New Year with the goal of spending less and saving more, and while that is a good way to go, the right steps from the start can make or break your plan to better your financial future. So let’s get started, here are some financial resolutions that you can make and keep throughout the year (and your life):
Financial expert Harrine Freeman and many others believe the most important and first step to get a hold of your finances is to examine your spending. Assess where you are by creating a budget. How can you be resolute with money if you don’t know what you are spending? Set a budget based on your take home income. One of the methods I use to create my budget is to do it based on the 50/30/20 Rule; Needs (50%), Wants (30%), and Savings (20%). Needs are items that are essential to life: rent, food, health, transportation, etc. Wants are items like cable/internet, vacation, clothes, entertainment, gym memberships, etc. Note that your needs and wants will shift over the years depending on your situation. And Savings should be used for retirement, emergency fund, and/or loans/credit card payments. Start using your money wisely instead of spending frivolously and enjoy watching your savings grown.
Other resolutions include:
Paying your Bills on time: Being consistently late could end up being more expensive and damage your budget. You may have to pay a penalty charge, which will add up over time and can impact/affect your credit score. Make sure that you set aside money for your bills or set up recurring payments that way you avoid missing payments or accumulating late fees. .
Avoid Debt: We may have moments were this unavoidable but in general you avoid taking on unnecessary debt. Buying things on credit still needs to be paid eventually.
Boost Your Savings: One resolution is to definitely set up a regular savings plan if you don’t already have one. Just think of it as a payment to yourself, an investment for the future. The goal is to have a savings account to protect against job loss or any emergency that presents itself.
Know Your Credit Score: This is the most important financial element after budgeting. If you are thinking about getting a home or have bad debt, your credit score is an invaluable indicator that can help or ruin your chances. Sign up to receive your credit score through an app like Credit Karma or use a credit monitoring service.
Make this year count and develop a plan that you can stick to in the future.