The New Year comes with resolutions and goals for the upcoming year. It can also bring stress from overspending the previous holiday season and the previous year in general. The beginning of the year is an opportunity to begin making financial goals also. Begin by making small financial changes to not set yourself up for failure if you make a slip-up. Begin by saving a small amount or by cutting down your morning coffee to 4 days a week instead of 7. Small changes will help you begin to see big strides when it comes to your financial position.
Saving Money
It’s important to know that saving money will always be beneficial, however, if you have excessive debts you need to pay, interest on those will cost more than having a plethora of money in your savings account. You would be saving yourself more money by paying down credit cards and loans before building your savings account up too much. An emergency amount in savings is beneficial in case something unexpected comes up.
Bankruptcy
If you’re worried about the potential of bankruptcy looming over you, now would be a great time to try out a spending freeze. Instead of telling yourself you can’t spend any money ever again until all of your debt is paid off because frankly, that’s pretty hard and is probably going to set you up for failure. Start with a week of no spending and put the money that you otherwise would have spent that week towards a credit card or car payment. You would be surprised as to how quickly a $10 lunch and a $7 cup of coffee add up. Start in small sections to make big strides with your finances.
Budget
Make a realistic budget with a significant other or family member and have them help you stay in check. Whether you go to using only cash or put spending limits on your accounts, whatever will help you not spend the money you need to be putting towards anything else will be beneficial. Look for a financial institution that allows you to have many different accounts within your account at no charge. For example, you can set aside money into one account for food and eating out, another for car repairs, another for splurges. By only allotting yourself a certain amount of money it will help you from overspending.
Bankruptcy may feel close and overwhelming and changes may seem impossible. By making small changes in your day to day purchases and living will help you make great progress in paying down debts you may have. Don’t spend more than you currently have and don’t make too lofty of goals so you don’t set yourself up for failure.