If you have ever made a resolution to get your finances in order for the new year, you are not alone. A 2017 banking poll found that saving money and tracking finances more closely was the year’s top resolution for many people. If you were not as successful as you would have liked when it comes to saving money or organizing your budget this year, you can try again, and there are a few goals and strategies you can keep in mind to increase your chances of success.
1. Commit to Setting Money Aside
If you started out strong in January with putting a set amount of money aside each month but failed to commit as the year moved along, this does not mean you are incapable of saving. When it comes to building a savings, commitment and sticking to a budget are two vital factors, so it may help to set a long-term goal.
For example, set savings goals for three months from January, then six, then eight. See if you can beat those goals, and if you do, you can reward yourself with a favorite activity or dinner out. Setting goals can help you visualize the future and make financial objectives seem more feasible.
2. Create a Medical Emergency Fund
Medical expenses can have a significant impact on your budget, especially in the case of an unexpected illness or injury. Even with personal insurance or Medicaid, out-of-pocket medical expenses can mount up quickly. Having a fund to protect yourself and family against these expenses can safeguard your savings.
If you receive medical insurance through your workplace, look into medical cards that you can load with a pre-set amount of money each month. The amount is deducted from your paycheck, and in many cases, the amount on the card rolls over from month to month. If you do not receive insurance through work, you may want to create a separate savings account for unexpected medical expenses.
3. Order Your Credit Report
If one of your financial resolutions is to repair or increase your credit score, the first step you can take is to order a copy of your credit report. You can obtain a free report from one of the three major credit reporting companies once a year, and ordering one at the start of the year can help you get a head start on increasing your score.
Once you receive your credit report, review it carefully. Check for errors or items that you do not recognize. Highlight smaller debts and make a plan for clearing those first as the year wears on. Having a superior credit score can open doors for home or car ownership, as well as the chance to receive competitive interest rates on any loans you might take out over the course of the year.
4. Be Proactive About Monthly Bills
The start of the new year is a good time to review your monthly bills and look for ways to lower them, if possible. For example, take a close look at your cable and internet bill and compare what you pay to other available rates in your area. Many new streaming options may be more cost effective than cable or dish services.
If you are struggling with auto or home insurance premium payments, talk to different insurance agents in your neighborhood about whether you qualify for discounts that may lower them. Being proactive about what you pay may help you see that what you pay currently for certain services may not be the best deal available.
Making a resolution to save money or organize your finances at the start of the new year can help you improve your quality of life. Taking small steps, being realistic about what you spend, and being aware of your credit can help you accomplish this worthy goal.