As the New Year gets under way the time has come to move on resolutions. People everywhere are starting to look at their lives and think about the changes they want to make. Some people want to lose weight. Others want to start a new hobby or complete a task they have been putting off for years. But for many individuals and families, their New Year’s resolutions will focus on making a financial change.
While different people will explain their financial resolutions in different ways, it all comes down to a few common concepts. Save more money. Spend less money. Get rid of debt. People want to see that their loans are paid off, that they have more money in their savings accounts and less money coming out of their wallets.
So, what can you do to make this New Year less of a struggle? Is it a realistic goal to try to pay off your debts and loans while making the most of your money? Absolutely! Here are a few ideas for turning this resolution into a reality.
Getting Rid of Debt
There is no magic wand that will decrease the amount you owe on loans or credit cards. In the same way, there is no magic to help you pay the balances down. It all comes down to parting with more money every month when the minimum payment is due.
One of the easiest ways to try to achieve this goal is to take the total amount of loans, credit cards and amounts that you owe. It can be tough to see that final number, but there it is.
Take this bottom line number and divide it by twelve. The number that you are now looking at is what it will take to come close to paying off your debts by the end of the year.
This doesn’t take into consideration interest or if you add any more debt into the mix. However, it gives you something to shoot for. If it isn’t possible to pay off all of the loans, consider choosing one or two of the loans and dividing the amount by twelve. If this is more reasonable for you, use this as a guide to paying off some of your debt this year.
Making the Most of Your Money
Unless a giant windfall of cash is headed your way this New Year, you are probably going to be counting on the same amount of income as last year. This amount can go up and down. As it does, adjust accordingly.
To make the most of your money, you need to know where it goes. Find out how much you are spending and what you are spending it on. Saving money is a great tool to get your money working for you. But this money isn’t going to just appear out of nowhere. It needs to come from you.
Finding the money you want to save with your current financial situation means cutting some things out. Take a look at what you spend and where you spend it.
By making cuts like eating out less or spending less money on clothes, you have the ability to take the extra cash and save it or use it to pay off debt.
It’s easy to get discouraged. Many people drop those New Year’s resolutions after a month or two.
Set your mind to stick with these goals, even when things get a little tough. Imagine how different next year’s New Year’s resolutions will be if you can pay off debts and save more.