The year is almost coming to a close and that means a lot of things. Not only does it mean Holidays, vacation, time with family, but also the beginning of a new year. This is the time of the year that people start to go crazy with new years resolutions. You know what I am talking about… People commit to get out of debt, lose weight and all the other things.
While I am just like many of you who get sick of hearing new years resolutions, I also appreciate setting goals and working towards healthy changes in one’s lifestyle. In fact, this is the time where I typically recommend to people to start thinking ahead. Often debt comes up because you need fast cash and you have no saving built up. If you are wanting to give your budget a makeover for the new year, here’s some basic steps that you can take to get it done.
Identify and Focus on Debt First
The first thing you need to do if you are turning over a new leaf is identify the current area in your budget where you are in the red. Do you owe a lot of money for one particular expense? If so, write out how much you owe and see how fast you can pay it off. There is nothing more encouraging than paying off your debt. Once this happens, great things financially start happening because you have more cash to play around with and less money going out.
Save Up Emergency Money
After you have conquered your debt, do everything you can to avoid going into debt in the future. Do this by saving a certain amount for a rainy day. This can be done even faster if you lower your expenses or get a side job, but neither of these are absolutely necessary.
Invest for Your Future
The best way to stay debt free is to not only have an emergency fund, but start investing. I think once you do this, you will realize that by focusing on investing, it keeps you from spending money on pointless things. In other words, it helps you prioritize your money and keeps you on the right track.
The new year is fast approaching. If you want to get a handle on your finances in 2013, it’s not too late to start your planning now. If you need an excuse to get things in order, there’s no better time than the end of the year.