The beginning of the year is the most popular time to make plans and set goals. If your New Year’s Resolutions this year included getting out of debt and taking control of your financial health, it’s not too late to get started!
There are lots of small changes you can make in your daily life that can add up to big savings over the course of the year. Below, we have the top ten tips that will help you take control of your finances. After reading this list, your new motto will be “new year, NO debt”!
1. Keep your credit in check
The average household has $15,654 in credit card debt. Is yours one of them? If you have credit card debt, make sure you are paying more than the minimum payment each month, and always make your payment on time. If your credit history is good, try calling your credit card company and asking them to reduce your interest rate. Above all else, don’t continue using your credit cards. If you can’t pay for something immediately, don’t buy it. Set aside money for larger purchases until you have enough saved.
2. Keep track of your expenses
There are lots of great apps, like Mint, that keep track of every nickel and dime you spend. Knowing where your money is going is key to staying out of debt. You might be surprised to find out just how much you spend on non-essential items. Watch for patterns — are there things you are paying for every month that you don’t really need?
3. Avoid payday mayday
Payday loans may be tempting, but they usually do more harm than good. Payday loan lenders charge interest rates, which can trap you in a loop of endless borrowing.
4. Reduce your expenses
Is there an area of your life that you can trim a little bit? Without sacrificing the little things that make you happy, see where you can cut back. You might find some hidden needless expenses that are draining your wallet. For example, maybe you can get a cable plan with fewer channels or a cell phone plan with less data.
5. DIY your life
Cooking your own meals or handling simple home repairs can help you save money — plus you can learn a valuable new skill in the process. Take your lunch to work and save ordering out for special occasions. The average restaurant meal costs around $12, while meals prepared at home average only $2 per person.
6. Start saving
Okay, you’ve reduced your savings and are tracking every cent. If you have some breathing room in your finances, consider starting a rainy-day fund. One bad car breakdown or emergency medical bill might land you back in square one. Plan for the worst but hope for the best. Put money in your savings account as soon as you get paid. Consider opening an online savings account with a different institution so you don’t see it every time you log into your bank account. Out of sight, out of mind!
7. Ask for a raise
One way to get more money is to make more money. If you’re due for a raise, speak up! But don’t just expect a raise because you ask for one. Be prepared to show your boss how much value you bring to the company, specific contributions you have made, and any other data that supports your request.
8. Start a side hustle
If a raise isn’t possible, consider taking up a part-time job or a side gig. Work a few nights at a local coffee shop, sell handmade crafts on Etsy, walk dogs, start a home cleaning business, or drive for Uber. The options are nearly endless!
9. Focus on what you have to be thankful for
The right mindset can go a long way towards keeping you out of debt. Fixating on what you’re lacking in life won’t make you happy. Focus instead on the present moment and on what you have to be grateful for. Having good relationships in life is scientifically proven to make people happier than material possessions.
10. Be smart about your taxes
Hiring a tax preparer may seem like an unnecessary expense, but a professional can help you find more tax credits and deductions that may reduce your tax bill. Consider calling a professional when tax season rolls around. The right tax preparer will not only ensure that you get the biggest refund possible, they will also be able to provide you with tips for maximizing your deductions and credits in the coming year so that you can take a proactive approach to your financial health.
Live your best life and stay out of debt
Armed with these ten tips, you’re ready to do battle with your debt! Need more help with tip number 10? We’re here for you. If you want to maximize your tax return and start saving, contact VTax for a free quote!