Whether you plan to make some New Year’s resolutions or not, there’s no better time than the beginning of the year to review your finances. Here are three tips to make sure you have your finances in order this year.
- Check your credit
Request your free annual credit report. This is the best way to see where you stand with your credit score. When you receive the report, review it to confirm the information is accurate and that it is free of fraudulent activity. Equifax, Experian and TransUnion, the three major credit reporting agencies, are required to provide consumers with one free copy of their credit report each year. Consider contacting each agency at a different point in the year so you have the most updated information.
- Create a budget
Creating a budget is one of the best ways to track what you spend and will help you identify where you can save money! It’s easy to get started:
- Track all of your daily spending for at least a month to get a clear idea of your finances
- Then review where you spend money and look for expenses that you can eliminate
- When creating your budget include a regular payment to your savings account. Paying yourself is a great tip to boosting your savings!
- Pay down debt
There are two basic strategies that can help you reduce debt – the highest interest rate method and the snowball method. The goal of the highest interest rate method is to pay off the highest interest rate debt as quickly as possible, because it is costing you the most money. The goal of the snowball method is to pay off your smallest debt as soon as possible. Do this by making the minimum payments on all of your debts, but put any extra funds toward the balance of your smallest debt to pay it off sooner. Once the smallest debt is paid off, dedicate that freed up money to the next smallest debt and so on—just like making a snowball.
It may be a little overwhelming to take control of your money, but with some work, dedication and patience you can get your finances in order!