The New Year’s arrival generally means it’s time to make some resolutions. You can get a fresh start with your financial resolutions by checking out these 5 smart money tips in the New Year:
Take Time to Set Up A Budget
Sitting down and developing a budget is really the first step in practicing smart habits with your money. A budget can:
- Help you see where you’re Spending Money
- Help you stick to your Spending Limits
Budgets help you set up the financial goals you want to achieve in the coming year. You can integrate our other smart money tips into your budget as you set it up.
Try Out Spending-Free Weeks
It’s easy to get in the habit of spending money on things we don’t really need, like a cup of coffee every morning on the way to work. A spending-free week requires you to only buy necessities for a whole week, cutting out everything else.
You can save a lot of money with a spending-free week, but the main goal is to allow you to focus on your normal spending habits. Engaging in a few spending-free weeks can even help you find cheaper alternatives to drains on your wallet.
Get Creative in Addressing Outstanding Debt
Credit card debt, mortgage payments, and car loans can all follow you from one year to the next. Resolving your outstanding debt can free up your finances. You should focus on the paying off the debt with the highest interest rate first.
There are a number of options you can take to handle high-interest debt. You could refinance your mortgage. Your bank or credit union could offer personal loans that would allow you to pay off high-interest debt in exchange for a smaller monthly payment. You could even take out a title loan on your vehicle to get immediate funds.
Focus on Your Credit Report
Did you know that you’re now allowed to freeze your credit reports for free with all major agencies for credit reporting? You can take advantage of this free option to ensure that no one can open up accounts in your name.
You might already have a lock on your credit to prevent fraudulent activity. Credit freezes are generally considered more secure, so take the time this New Year to protect your credit for free.
Get Ready for Rising Inflation
Inflation is beginning to noticeably rise in the U.S. for the first time in years. Growing inflation can change your financial situation by cutting into your retirement savings.
The funds in your retirement account can take a serious hit as inflation increases. You can deal with this issue by diversifying your portfolio as soon as possible. Focus on including some stocks and TIPS bonds in your savings as a bulwark against inflation.
You can start the New Year off right by focusing on a few simple tips on smart money management. Take charge of your finances and you’ll be ready to deal with the shifting economy, debt, and growing inflation rates.