With the New Year now in full swing, resolutions had perhaps been made – now may just be the ideal time to start to get your finances in order. So of course this will mean you will want to have a plan of action for how to obtain this goal and here are some areas you can take a closer look at as you take steps to make some real financial improvements this year.
With that being said, here is a quick guide to starting 2016 off on the right financial foot.
Revise Your Budget
To get the ball rolling, it is best to take another in depth look at your current budget. Whether your budget and/or budgeting skills may have failed you in the previous year and as a result your finances did end up getting a bit out of hand – then you definitely want to make some adjustments, making your budget more functional for your current needs.
This process will of course involve looking at what you have spent in the previous months and what amount of income you have coming in this year. After you have better identified the exact total for each side of this spectrum then you can set limits on and prioritize your spending. Ultimately, having a budget that aligns more evenly with what you can realistically afford at this point in time will serve you much better in terms of managing your ongoing finances this year.
Check Your Credit Report/Credit Score
Another method of turning your finances around for the better this year is to review your credit report and/or at least identify where your credit score currently lies. The more you know about what specific credit mistakes you have made/or any errors that have affected your credit score – then can you be more effective in re-establishing your credit and improving a bad credit situation.
Knowing if you have a low credit score predominantly because of late or missed payments, a steadily increasing credit balance, an overall debt load that is too high – or all the above can help you take steps to correct these issues as soon as possible.
Start Paying Your Bills on Time
By reviewing your credit report, you may have noted that a large portion of your lower score can perhaps be attributed to a poor payment history. If this is the case, then starting with changing your payment habits and beginning to make them on time, every time can also lead to improved finances in 2016. In the end, following through with these payments will reflect much better on your credit report in the near future.
In addition to making payments on time, if you are consistently making late payments, it is also likely that you have been incurring unnecessary fees that are making your debt all the greater. Instead of being late on payments – go about setting up notifications to remind you to make each payment on time. In order to achieve even more success and ease in these actions, also consider putting in place automatic payments for various accounts – especially for those that have proven to be more challenging for you in the past.
All in all, if you keep in mind the importance of payment history in relationship to your credit score is as well as the negative ramifications of making late bill payments – this mindset will be key to a stronger financial position.
Step-Up Your Savings Plan
If you haven’t already been putting much money away in terms of savings, then now may be the time. If you are saving some money each month/each paycheque already, then consider increasing this amount by 5 or 10 dollars – or more each time. Whether it is a specific savings plan – a retirement, an education, an emergency fund, for example that is the recipient of your savings, being able to make the ultimate contributions you can can help you with these savings endeavours.
Another beneficial savings plan is through a Tax Free Savings Account (TFSA). A TFSA can also be effective in helping you to routinely save throughout this upcoming year. Again, Having automated withdrawals each month will also help you to save, and will require very limited action each month on your part so it also can save you time – go figure!
Tackle Your Debt
In addition to saving, in order to have a successful financial start to 2016 – you will also need to devise a plan to rid yourself of some of your debt. While this task can sound highly daunting, the good news is there are many methods of helping you tackle your debt in a personalize and realistic manner.
You can start by prioritizing your debts – which debt is the most burdensome at this point in time? Well, after figuring this out you can come up with a plan to pay it off. Perhaps, you will pay off a large portion of that credit card that has the highest interest – and/or the highest balance as well.
Loan consolidation may also be an effective way for you to reduce your overall debt loan. Seeking out the support of a debt-relief expert can assist you with this process. A debt -reduction specialist can also help guide you towards the most appropriate strategy of alleviating your debt this year, if you need further assistance identifying this starting point.
All in all, there is support out there for those in need of debt-relief assistance – you don’t have to do it alone – and you can find a solution that will best meet you current needs as well.
Boost Your Income
One final method that can be a rather straightforward strategy of improving your finances is to look for avenues of increasing your income. If you are currently unable to advance your income within the limits of your present employment situation, perhaps you can opt to add to your overall take-home amount by looking for additional sources of income.
Online work opportunities are on the rise and by nature they are flexible and can also compliment and adhere to your existing work demands. With a internet connection working from home – or from anywhere really can be a convenient method of helping you boost your income. Even having a few extra hundred dollars each month can really do a lot for your financial situation. This amount of extra money can go towards paying off your debts and/or can be placed into your savings – either way this is a much better place to be in terms of income, compared to where you were before.
By making some or all of these adjustments this early on in the new year – you can be quick on your way to starting 2016 on the right financial foot – not mention making sure it continues to be smoother sailing for you from here-on-out – in terms of your financial position.