Financial Changes

Financial Changes to Make This New Year

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This is the year that you’re going to get your finances in order. It really is. You’re just not sure how to accomplish that.

Why don’t you start by making the following changes? These should dramatically improve the state of your personal finances this year.

Build a Budget

You haven’t been following a budget, which means you’ve been spending blindly. You’re assuming that you have enough income to cover all of your expenses properly, which means you’re risking some serious financial mistakes, like overdrawing your checking account or bouncing an important check. Following a straightforward budget can help you organize all of your expenses without overspending.

How can you get started on this goal?

This is a goal that will be really easy to tackle! Start by downloading one of the top budgeting apps onto your smartphone or desktop. Then, build your budget by following the app’s step-by-step instructions. Soon enough, you’ll have basic spending guidelines that you can use in the months ahead!

Make Yourself a Safety Net

Are you living without an emergency fund? That’s a big problem. Without an emergency fund, an urgent expense might fall directly into your lap, and you might not be able to pay it off right away. If you tried to use the money sitting in your checking account, you could risk upending your routine spending. Using that money could make it difficult to cover your utility bills, your insurance premiums or even your groceries for the rest of the month.

In this case, you might have an easier time using credit to cover the urgent expense. This option might not have the same immediate impact on your monthly budget, so you can still cover your essentials like bills and groceries as normal. You could access credit through your credit card, or you could go to a website like CreditFresh to see whether you’re qualified to apply for a personal line of credit loan. An approved line of credit loan could give you access to temporary funds to manage an emergency expense quickly. Much like a credit card, after using a line of credit loan, you could repay what you borrowed through a simple billing cycle.

How can you get started on this goal?

Having an emergency fund could help you avoid this entire situation. You could withdraw what you need from your savings account and use it to pay off an urgent expense right after you encounter it. Doing this should have no impact on your personal budget. You’ll be able to recover from your emergency almost immediately.

Start Saving for Retirement

You’re thinking that your retirement is years and years away. You don’t have to worry about it yet. You’ll get around to putting together a retirement savings plan eventually.

Stop putting this goal on the back burner. The earlier that you start your retirement savings plan, the better. You’ll give yourself more time to collect savings for this time of your life, which means that you’ll create a bigger nest egg for yourself to rely on when you’re no longer an active member of the workforce.

How can you get started on this goal?

The easiest way to get started is to open up an individual retirement account (IRA) — this is an investment account designed specifically for building up retirement savings. Then, assess your budget to see how much you can afford to put toward this important savings goal every month. Transfer that into your IRA on a regular basis and watch it grow. And whatever you do, don’t make an early withdrawal from the account. You should leave the savings alone until you’ve reached your retirement age.

The New Year is a time for big changes. So, why not make these three changes this year? You could completely transform your financial life for the better.

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