New Year, New Finances

Author: Hannah Hall, Challenge America Program Coordinator

The new year is a time of reset and restart. One area that many choose to reset and restart is in their finances. Because of the rise in prices within our economy, it has become even more important to many to budget and monitor their spending. There are many ways to budget, get into a financially better place and monitor spending, but here are some fundamentals that many financial experts agree with. 

Tip 1: Create a Budget - Creating a budget allows you to know where you are spending your money and then can be adjusted to save money, pay down debt or reallocate funds. Creating a budget doesn’t necessarily mean you have to cut corners and not have the things you want, it just means you are monitoring the money you are spending and if you choose, you can adjust amounts being spent. Already have a budget? Great! The new year is a great time to revisit it and make sure your money is still being spent the way you want. 

Tip 2: Create an Emergency Fund - Just like Murphy’s Law says- if you’re not prepared, the worst will happen. Although we hope that nothing catastrophic happens to anyone, it is important to be prepared! Creating an emergency fund can help give peace of mind if the car breaks down, your house gets hit with a storm or losing a job. Financial experts recommend having 3-6 months of expenses. This may take some time, but it’s a goal to work towards!

Tip 3: Lower Your Debt - By lowering your debt, you can improve your credit score and give yourself more income to reallocate. There are also ways to consolidate your debt, get lower interest rates and get your debt paid off faster. 

Tip 4: Set Goals - The best way to get your finances where you want them is to set attainable goals! Goals give you something to work towards and will help keep finances on the forefront of your mind. 

Start small and pick one of these tips to work towards. Once you achieve that, go on to the next. 

Which tip are you choosing?