By Bianca Gentry
Happy New Year! With 2013 having come to a close, you’ve probably already set your New Year’s resolutions for 2014. In the past, I have made the same old resolutions most people make – like exercising more, eating healthier, losing weight – only to break them by the end of January. This year I’m taking a different approach, making some financial resolutions for the new year. I want to pay off all my holiday debt, build up savings, learn to budget better, and stop wasting money (I have resolved to get back in the habit of grocery shopping with coupons this year).
So what are some other financial resolutions to make for 2014?
Keep track of where your money goes. Write down everything you buy, from groceries to your morning coffee to that mid-afternoon caffeine boost from the vending machine. You might be shocked to see how much of your money could be saved by brewing your own coffee at home or bringing lunch to work a few days a week. Writing it down will help you see what areas need to be improved upon.
Monitor your credit. You can get a copy of your credit report from each of the three major credit reporting agencies for free once per year at www.annualcreditreport.com. That means you can check your credit for free every four months. Make sure your information is accurate and there’s nothing suspicious on your report.
Pay off as much debt as possible. If you have a few extra dollars each month, throw it at your credit cards or student loans to avoid accruing more interest. It’s always a good idea to pay your balance in full, but at the very least try to pay more than the minimum payment to get your debts paid off as quickly as you can.
Start an emergency fund. Or build on the one you already have. It’s a good idea to save up at the very least three months’ worth of living expenses, but try to save more to be on the safe side. Putting even a small percentage of each paycheck into a savings account will pay off in the case of an emergency. I’m going to be participating in the 52 Week Money Challenge this year – an easy way to start an emergency fund or save for a vacation, perhaps. (Hint: put your money in a savings account that accrues interest to save even more!)
Open a 401(k). This is the best thing you can do for your financial future. Many employers will also contribute to your retirement fund (that is free money!), but you have to open one and contribute to it first. Talk to your employer to see what your company offers.
Spend on your needs, not wants. I know this can be hard sometimes. I love clothes and I’ve been guilty of splurging a few times, but I’ve gotten better about exercising a little will power when it comes to things I actually need. Take care of your needs first – pay your bills and debts, add to your savings accounts, budget for necessities – and treat yourself to a “want” every now and then if you have discretionary income leftover.
Focusing on these areas is sure to make you better off financially in 2014. You’ll save more money, pay off more debt, and be on track to achieve a better financial life for yourself.
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