Posted on: Jan. 06, 2017 in Credit, Debt, Money, Credit Score

New Year’s Resolutions seem to center on a few themes. Many are rooted in health such as losing weight, eating better, exercising, or quitting smoking. Another popular area of focus is finances. But like “health,” “finances” is a broad category. Without narrowing that down and specifying some goals, it’s easy to fall back into bad habits. If you resolved to work on your finances but now you’re scratching your head wondering where to start, start at the beginning.


Step one of any financial plan is to fully know your situation. Look at your income, your outflow, your debt, the interest rates you’re paying on that debt, and your credit score. While it can be painful to see all this all at once, it’s a necessary part of creating an action plan. Only after examining your situation can you start to make changes.

Next, look at what you need to accomplish and why. Are your credit cards maxed out? Is your credit score low? Are you not able to meet your monthly expenses? Do you have a major purchase looming with no way to pay for it? These are all specific goals to consider. If it’s all of the above, try to prioritize based on the timing of the need.

Others may feel that they are not in a crisis but they could be doing better… somehow. Maybe you have some habits that are crushing you but aren’t really helping you either. Here are a few ideas that might jumpstart your thinking for the new year:

  1. Track your spending for at least a month. See where your money is going and see if there are any leaks you can plug.
  2. Create a budget. Make your money work for you by assigning every incoming dollar to a bill or savings account.
  3. Build your emergency fund. If you’re making all your payments on time, make sure you’re paying yourself. Aim for $1,000 to start, then work towards three to six months’ worth of expenses in reserves.
  4. Save for retirement. Do you have a retirement savings plan available to you through work? Contribute as much as you feel comfortable with, paying attention to any possible matches your company may give you.
  5. Cancel something you don’t use. The gym. Cable TV. Monthly subscription boxes. Anything that’s automatically pulling money from your account that you’re not getting any benefits or pleasure from? Ditch it. Then divert that new-found money to paying off debt or into a savings account.

Change is hard. By picking just one thing, you eliminate that all-or-nothing feeling of overwhelm and start to make progress toward your goal. Once you start to see those positive changes, the next steps get easier to take.

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