The New Year is an opportunity to start fresh. You can forget about the troubles of the last twelve months and take advantage of this clean slate. So, if you want to do better with your money this year, you should take on these healthy financial habits once you’ve recovered from the champagne.
Habit 1: Build an Emergency Fund
It’s wise to be prepared for the unexpected. An emergency fund will help you handle urgent problems like car breakdowns or plumbing trouble right away, even if you don’t have enough room in your budget to cover the costs. One of the first things that you should do this year is to start building an emergency fund so that you can always have a financial safety net to fall back on. You should also make plans to pay off any outstanding small loans if possible, perhaps with the help of something like a debt consolidation loan.
In the meantime, you might want to apply for a line of credit. You can use it to cover urgent, unexpected costs while you slowly build up your savings for your emergency fund.
An emergency fund should be an essential part of your personal finances. Click here to see how to put together a financial plan for the upcoming year so that you’re completely prepared. The how-to guide can also help with debt repayments, personal line of credit rates,investments and budgeting.
Habit 2: Follow a Monthly Budget
Speaking of budgeting — making a monthly budget should be on the top of your to-do list. A monthly budget is crucial for keeping track of your everyday costs and saving enough money to tide you over until the next paycheck. If you’re not sure how to start, download one of the best budgeting apps on your phone and follow the instructions.
Habit 3: Pay Your Bills On-Time
Missing your bill payments is a bad habit to keep. It makes you rack up late fees and penalties. It damages your credit score. If you’re not careful, you could have a service cut off or an asset seized.
Start using calendar apps or bill monitoring apps to keep track of those upcoming due dates. Or, if you really want to make sure that those deadlines don’t slip your mind, you should think about automating your payments. You can use automated bill payments for monthly responsibilities like your mortgage, cell phone bills, credit card bills, auto loan payments and more.
Habit 4: Do Financial Check-Ups
Every year, you go to the doctor for a check-up. The appointment is an opportunity to confirm whether you’re in good health or not and to investigate any complaints and concerns. If there’s something wrong, your doctor will catch it.
You should follow the same concept with your finances. Give it a routine check-up to see whether everything is going to plan or whether there’s something wrong.
What can you do during a financial check-up?
- Look through your credit card bills to inspect every transaction. You could be spending money on memberships and subscriptions that you don’t use anymore.
- Look for extrabank fees in your accounts.
- Check your monthly budget to see if it’s working for you. You might need to make adjustments to certain categories or find ways to cut costs to stop overspending.
- Ask for better deals from account providers. You could trim the costs for phone plans, internet plans, cable bills and more.
If you’re having trouble coming up with resolutions to tackle in the new year, start with the ones that will affect your wallet. Your personal finances will be in a lot better shape if you commit to all four of these.