Around this time, those of us in the habit of forming New Year’s resolutions often start planning—or at least thinking about—the life changes we’d like to make. Especially given the state of the world in the last couple of years, improving personal money situations is a common goal. But where to start? In this post, Resolvly LLC takes a look at areas of finance many want to improve and how to act.
1. Set a Personal Budget
Most people understand the need to manage monthly expenses, yet many put off creating a personal budget. Sure, it’s not the most fun thing to do, but it’s a great way to track where your money goes each month and a powerful tool for saving money.
Take a monthly approach. Begin by calculating your income. Then list all of your regular monthly expenses—rent or mortgage, utility bills, car payments, credit payments, groceries, and so forth. Refer to your online checking and credit statements if you need help.
Subtract these expenses from your income, and you’ll see how much you’ll have for more discretionary expenses (i.e., clothing and entertainment). This makes it easier to set spending limits.
2. Re-Budget Your Retirement Fund Contributions
If you’re permanently employed, you might have a retirement fund like a 401(k) or IRA. Many choose to have a regular paycheck deduction that funnels straight into the account, with their employer matching employee contributions. This is basically free money for your retirement.
Set up your monthly retirement contribution to get as close to the IRS’s annual maximum as you can (and count it against your monthly budget). This is a painless and straightforward way to sock away more money for the future.
3. Micromanage Your Credit
You might shrink back a little when you see the word “micromanage” since it calls to mind images of an overbearing boss hovering over your cubicle. But when it comes to personal credit, a micromanager is the best role you can take. A healthy credit score is vital to opening up financial and life opportunities.
Commit to paying at least the minimum due every month. Consider keeping credit purchases at a level where you can pay them off in full every month. Check your credit score three times a year. The three major agencies allow you to check your score without penalty once every year, so stagger your schedule to take advantage of that provision.
4. Guard Against Identity Theft
Identity theft is, unfortunately, here to stay. Bad actors can wipe out your credit record in one fell swoop. But you can protect your finances against criminal activity.
Along with checking your credit reports regularly, consider signing up with a service that monitors your credit account for fraudulent activity. Both paid and free credit monitoring services check the dark web, scanning for your personal information and alerting you if it encounters a potential problem.
Get Resolvly On Your Side
Resolvly LLC is a Florida lawyer referral service that finds bar-approved attorneys who resolve consumer debt issues. We help you find practical and legal ways to cut or even vacate unsecured debts, from credit cards and private student loans to business debt and medical bills. Contact us to learn more.