The new year offers a chance for a fresh start. But your credit cards may have taken a beating if you’re like many people after the holidays. Getting your finances in order can help you take on the new year full steam.
Here are five ways to get your finances under control:
Make sure to budget
Tracking your monthly spending can give you a better understanding of where you’re spending your money. It also lets you control where it goes and cut back where you need to. For people tired of spreadsheets and looking for an easy way to track your spending, a budgeting app like GoodBudget or Honeydue can help keep you on track.
Save your dollars
If you didn’t before, now is the time to start a savings account. Putting money away each month is essential for your financial future and retirement and provides a nest egg in case of an emergency. While the rule of thumb is to put 80% toward your expenses and 20% in savings each month, designating what you can afford is better than saving nothing.
Pay down your credit cards
Paying down your credit cards is essential to helping you get out of debt. But that’s sometimes easier said than done. Techniques like the debt snowball or debt avalanche can guide repayment. But making sure you make your payments on time is critical, so your credit score doesn’t take a hit.
Keep track of your credit score
It’s a common myth that checking your credit score will lower it, but that’s not actually true. You can check your credit score for free with services like CreditWise from Capital One or Chase Credit Journey. This allows you to see what’s impacting your credit score regularly. Plus, it will give you more visibility, so you can take immediate action if you’re a victim of identity theft.
Look into credit counseling
Sometimes, credit card debt can be so overwhelming we need help. If you feel that way, make an appointment with a credit counselor, who can help you create a budget. They can also enroll you in a debt management program, allowing them to work with your creditors to reduce your interest rate and consolidate your credit cards into one affordable monthly payment.
Through careful budgeting, saving, and adhering to a repayment schedule, you can regain control of your finances for a financially healthier year.
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