By Jillian Taylor-Mancusi
The New Year is a time for new beginnings. If last year wasn’t your best financially, now is the perfect time to get back on track. Making a new resolve to control your spending and pay down debt is the first step to improving your finances.
Here are six smart money goals that will help you get started.
1) Build a cushion of savings.
One recent study found that 42% of Canadians are living paycheck to paycheck. If you fall in this category, make this the year you get ahead of the game. A cushion to fall back on can eliminate the stress that comes from living paycheck to paycheck. Saving can be overwhelming, especially if you’re starting with no savings at all, but one month’s worth of expenses is a good place to start.
Add up all your expenses for the month, then work on putting money in savings until you reach your goal. This might mean cutting back for a little while or postponing a large purchase, but the peace of mind is well worth it.
2) Keep an eye on your budget.
It’s very easy to get to the end of the month and ask yourself, “Where did all my money go?” Tracking your finances can help you avoid this. If you have a smartphone, budgeting apps like Mint or Expenditure can make tracking your expenses a breeze. If you don’t have a smartphone, don’t worry. Checking your bank statement online can also help you control your budget.
3) Control your spending creatively.
It’s easy to go overboard on groceries, entertainment, and gifts if you’re not careful. Control spending by:
- Using cash only for your purchases.
- Loading a pre-paid card with your budgeted amount
- Remove your debit and credit cards from your wallet altogether if you’re worried about overspending
4) Make more money
This is actually easier than you may think. You can make more money available to your budget by picking up a part-time or weekend job temporarily until you reach your saving or debt reduction goals or selling items around the house. If you really want to get serious about your spending, you can downsize to a smaller home or sell a second car and use public transportation instead.
5) Look for ways to cut insurance and interest.
Make it an annual habit to review how much you are paying for home and auto insurance, banking and credit card fees, and loan interest. If another insurance company can save you money, switch. Or, refinance your loans to a better rate and save on interest payments.
6) Get help getting out of debt
If these money goals seem out of your reach, you may need the help of a financial professional. Licensed insolvency trustees and other money experts can help you get a new beginning on your finances by helping you get out of debt and form good money management habits.
The new year is a time for new beginnings in all parts of life, including your finances. Use these goals as a way to start your financial year on the right foot.