Six Financial Tips To Make The Best Out Of 2014 - Assess Your Debt

Financial Tips
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A new year seems like a fresh financial slate. It’s a time when many people give serious thought to changes in how they handle money. That’s a good thing. However, when it comes to money, you may first have to address circumstances created by how you’ve handled it in the past. Do that first and then commit to making your money management changes permanent. Here are six financial tips to make this year the best. 

1. Assess Your Debt:

List and add all your loans, such as for housing, transportation or education; all your credit cards; and any other debt. Write the total you need to pay off as well as the minimum total you need to pay each month. 

2. Assess Your Monthly Living Expenses:

If you don’t know how much you spend on things like groceries and gas, figure it out. Look at past bank statements or receipts. If that doesn’t work, keep details of what you spend for one month. Then list the amount you need each month for essentials, such as groceries, health care and transportation, and for wants, such as entertainment and eating out. 

3. Assess Your Income:

If you are the sole bread winner with no investments, this is easy. If your family has more than one source of income, add it all together. 

4. Weigh Your Debt And Expenses Against Your Income:

How much, if any, is left each month? That’s what you have left to reduce debt or save. If you want more, look at your nonessential expenditures for ways to cut costs. 

5. Reduce Or Eliminate Credit Card Debt:

If you have one or two balances that are much smaller, pay them off first, using some of your leftover monthly money. Next, tackle the account with the biggest interest charge. Then make this the year you no longer carry over a credit card balance from one month to the next; this achievement alone can make a big difference on your future financial years. 

6. Make A Budget:

Set reasonable amounts to spend each month in each category. Add a small cushion in your monthly budget for small unexpected extra costs. Once you make the budget, stick with it. If you decide to spend no more than $10 monthly on coffee out and to bring coffee from home the rest of the time, follow through on that. You’ll see the results of shifting money to paying bills. 

7. Make Sure You Have A Nest Egg:

Try to save an amount equal to three months of living expenses. If you can’t do that, save what you can. Make sure you have money you don’t touch so that you can use it for an emergency, such as a huge car repair or medical bill. That way you pay with money, not credit cards. 

8. Reduce Or Eliminate Your Loans.

If you’ve gotten this far, see whether you can pay off any loans more quickly by sending extra money each month. See whether you can refinance any loans at a lower interest rate. 

9. Invest Wisely:

Consult with a financial expert about how best to invest at your level of ability. This conversation should include saving for retirement.

Changing your financial habits may not be easy, but it can certainly be rewarding. Make the effort to evaluate your situation and to improve it. Then follow through and you will end the year with a more secure financial future.

Justin Reeves is a entrepreneur who enjoys blogging about personal finance, start-up business and more. If you want to find more articles on these topics, be sure to follow www.makingsenseofcents.com.