Time to Take a New Look at Your Money Habits
The New Year holiday creates a feeling of starting fresh and encourages us to set new goals. While diets come to mind, setting new financial goals should be on the top of our lists. As you reflect on the past year, focus on your experiences – build on what worked and what didn’t – to shape this year’s money habits. Here are some ideas to consider as you set your financial goals for the New Year.
New Year, New Savings Account
Think about what you want to save for the coming year and commit to opening a savings account to reach that goal, whether it’s creating an emergency fund or setting money aside for future purchases. There are many types of savings accounts available to save for both short-term and long-term goals. Once you decide on the type of savings account that will meet your goal, you can commit to depositing a set amount regularly to get into the habit of saving.
Pay Down That Old Debt in the New Year
Confronting your debt and thinking about how to pay it off can be scary and overwhelming. Make a list of your debts, noting the monthly payment, current balance, and interest rate, and make a plan to start paying down the debts. Many experts recommend focusing on either debt with the highest interest rates or debt with the lowest balances to pay off. While you will likely save more money paying off debts with the highest interest rates, it may be faster to pay off the smallest balances first, and seeing this progress may help keep you motivated.
Keeping your finances organized will help you control your money and achieve your financial goals. Some basic tasks to help you get organized include making a budget, tracking your spending, and putting a system in place to ensure you pay your bills on time every month. Be sure to monitor your credit card and bank statements for any unexpected fees or unusual activity too. The sooner you find mistakes or unauthorized transactions, the easier it is to correct those issues. Like dealing with debt, organizing your finances can be daunting, so start small by picking one organizational task and focusing on that task for one month before adding another.
Protect Your Money All Year, Every Year
With so many financial transactions occurring electronically, it’s important to proactively protect your personal information including your credit card and bank account numbers. Never provide your personal information in response to an unsolicited request, whether it is over the phone or the Internet. Always track your bank and credit card statements and your credit reports for unusual activity. Catching abnormal transactions early will allow you to take steps to prevent more harm if your information has been stolen. One important step to protect yourself from online scams and theft is to change your passwords regularly.