New Year’s is the time to start fresh. Why not start fresh with your personal finance goals? If you’re motivated to make some changes with your money management habits, then take a look at four resolutions that you’ll want to set after the big countdown to midnight is over.
1. Make an Emergency Fund:
Do you not have an emergency fund? You’re not the only one. Research shows that only 41% of Americans could cover a $1000 emergency with their savings — this means more than half of the country would be panicking about payments when a surprise expense ruined their day.
Preparing for the worst may not be the most exciting resolution to put at the top of your to-do list, but it is the most practical. You never know when something might go wrong, and you certainly don’t want to have the rug pulled from under you.
That’s why you should start building a household emergency fund right away. You can open up a savings account and put a portion of your monthly budget in there,or you can put spare cash that you have in your pockets into a jar whenever you can.
While you’re building your fund, you should have other safety nets on hand. Take a look at these personal loans in Washington State that you can apply for online in case you get surprised with an emergency expense that you can’t afford. A personal line of credit allows you to request a withdrawal from your account, as long as you have available credit and your account is in good standing. Then it sends the amount into your bank account quickly — you could have everything you need after one business day. That’s a convenient safety net.
2. Pay Off Debt:
Of course, one of the best financial resolutions to take on this year is to tackle the debt that is weighing on your shoulders. Whether you’re living with a credit card that’s much too close to the limit or a big pile of student loans, you should make it a goal this year to focus on bringing the total down.
3. Boost Your Credit Score:
A high credit score comes with a lot of benefits. It can get you lower insurance rates, lower interest rates, lower safety deposits and better chances of getting approved for loans. On the other hand, there are consequences of bad credit scores that can make your life a little bit harder — and of course, more expensive. If your score isn’t in the top ranks, you should try to give it a boost.
How can you do it? Here are some tips that could help you raise your score over time:
- Pay your bills on-time, every time.
- Keep old credit accounts open.
- Whittle down debts.
- Increase your credit limits.
- Dispute errors on your credit report.
4. Plan for the Future:
You have some big plans for the future. Maybe you want to buy a house. Maybe you want to retire early. Maybe you want to send your kids to college. These are all dreams that will take a lot of time and money to come true. For instance, the average tuition fees for college are already very high—there’s no telling what they will be like when your kids are old enough to apply.
That’s why you need to take advantage of the time that you have now to save up for these long-term goals. Even if the deadlines are decades in the future, you should still take the opportunity this year to open up a savings account and get a head start.
New Year’s is the perfect opportunity to get inspired and make a big change in your life. Why not make a big change with your finances?