The holiday season can get you out of your financial groove so let’s make sure you are ready for the new year! Here is a short checklist to help guide your finances smoothly into the New Year!
REVIEW YOUR CREDIT CARDS
We suggest budgeting for Christmas expenses in advance and skipping the credit card debut but we know that isn’t always how things work out. If that is the case for you this year here is what to do.
Gather your statements! Were any Christmas spending put on credit cards? Do you have a balance from anything else from the year?
Now is the time to create a plan to get you to a zero balance quickly! Missing a payment, keeping your balances too high, and maxing out cards can hurt your credit and be mentally draining. Go back to your budget and review what amount you can pay each month toward your balance and calculate the time frame for payoff. This will get you focused and give you a goal to work toward!
REVIEW YOUR SAVINGS AND EMERGENCY FUND
Did you use money from savings or your emergency fund to pay for gifts? If so, you may find yourself in some financial trouble if you need this money for unexpected, but necessary expenses like car or home repairs. You’ll want to rebuild these funds as quickly as possible to reduce your financial stress.
REVIEW YOUR BUDGET
You’ll need to find extra money to pay down your credit cards, and then rebuild your savings. But if your income hasn’t increased, that money has to come from somewhere else.
That means it’s time to get serious about slashing unnecessary items from your budget. Even if it’s only temporarily while you get back on track. Cancel gym memberships, cable services, and slash your entertainment fund to repurpose that money to debt and savings. Start packing your lunches, making coffee at home, and fix budget-friendly dinners until your credit cards are paid off and your savings are replenished.
Yes, it will be hard, but it’s only for a short time and in the end, you’ll be glad you did it.
REVIEW YOUR INCOME
You can get your finances back on track much faster if you start bringing in extra income and directing that money to paying off debt and building savings. Consider some part-time opportunities that you can do in your free time to earn extra cash. Get a part-time weekend job, drive for Uber or Lyft, start a dog-walking service, offer to rake leaves, shovel snow, or babysit. If you’re crafty, open an Etsy shop.
The opportunities for earning extra income are endless. As an added bonus, you may decide that you like the work and the income that goes with it even after you’ve paid off your debt.
Getting your finances in order as quickly as possible will ensure that there are no long-lasting effects to your overspending. Once you’ve reviewed your finances and made a plan for how to get them back in order, review your holiday spending. It’s time to start planning for next year so that you don’t find yourself in the same place again.
If you are having a hard time budgeting consider contacting professionals like our team here at Worthwhile Wealth Council to get your financial future on track!
This commentary was originally posted by Emilie Burke on 12/26/2018
**Disclaimer: This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.