With a full 365 days before you, it’s easy to talk yourself into grand plans for your finances in the New Year. Certainly, there is nothing wrong with aiming high. The danger, however, is setting the bar for success so far above your starting point that it ends up looking and feeling too far out of reach to realize. And as soon as you feel discouraged, it’s likely not long before you find yourself giving up.
Thankfully, you’re the one making the rules, so loosen them up a bit.
If you know you need to focus on financial improvement in 2014, why not try just getting started? Now, this is not to be confused with starting then stopping and calling it good. Getting started means beginning the process of improving your finances. And engaging in a process implies continuous behavior.
You may already have some financial starters in mind, but here’s a list of areas commonly in need of attention.
Do you barely make ends meet? Start living on less. This will mean going through your expenses with a fine-tooth comb and minimizing or eliminating anything and everything you can. Then comes the hard part — sticking to it. Just remember, you made the budget, so you must believe it’s possible. It’s up to you to prove yourself right.
2) Start paying down your credit cards.
Are you only making your minimum payments? Start tacking on a little extra every month. If you can double it, fantastic! But paying anything extra makes a difference, not the least of which is getting into the habit of paying more than required.
3) Start paying with cash instead of plastic.
Do you use your credit or debit cards to pay for just about everything? Start carrying cash. Plan ahead and only take with you as much as you have budgeted for shopping, dinner, entertainment, etc. Leave your cards at home and you’re guaranteed to avoid talking yourself into impulse spending.
4) Start saving money.
Do have a dwindling or non-existent savings account? Start setting something aside. Only you know what your budget can allow, but even as little as $5 or $10 a month will add up to something by the end of the year. What you will more likely find, though, is that once you get into the habit of setting money aside every month, you will find it easier to set aside more.
5) Start monitoring your credit.
Has it been over a year since you’ve checked your credit reports? Start requesting the free copies you are legally entitled to every 12 months. Go to AnnualCreditReport.com and get your credit reports from Experian, Equifax, and TransUnion.
Is old debt dragging down your credit score? Start the debt validation process. Go through your credit reports (all three), note negative listings, and request from the credit bureaus proof that the debt is yours. What you may find is that your account has been sold once or multiple times, but the documentation proving your ownership of the debt didn’t pass along with it. Bottom line, if your debts cannot be validated, you are not legally required to pay them and they must be stricken from your credit reports.
Any other financial starters you’d add to the list?