1. Start a budget
Creating a budget or spending plan can help you get more of what you truly want. It helps you reduce frivolous spending and focus your resources on what’s important to you. Track your spending for a month. Keeping a record of everything you spend will show you where your money really goes. It can be eye-opening!2. Trim expenses
When you track your spending, you may be amazed at the amount you spend on trivial purchases. (Try our calculator
to find out.) Plugging up the small leaks draining your wallet every week — lattes, lunches and the like — can make a big improvement in your financial outlook.
Another approach to cutting costs is to look at how you can reduce your major expenses such as housing, insurance, transportation, etc. Could you refinance your car loan or mortgage at a lower interest rate? When was the last time you comparison shopped for insurance? 3. Pay down debt
There are many approaches to reducing debt. One way is to make the minimum payments on all but the one with the highest interest rate. Pay as much extra as you can on that one each month. When it’s paid off, send that payment amount to the one with the next highest interest rate. Repeat until you’re debt-free.
Another method is the snowball method. With this strategy, you put your debts in order by balance rather than interest rate. Budget to pay the minimum on all but the smallest debt, to which you devote as much extra as possible. When that debt is paid off, send the extra payment amount to the next smallest. This approach can help you stay motivated because you may see some debts eliminated more quickly.
You could also consider consolidating your debt
so you only have one monthly payment with, perhaps, a lower interest rate. A savings- or CD-secured personal loan is an affordable option. If you own a home and have enough equity, a home equity loan may also be a good choice. 4. Save more
Building an emergency fund with three to six months’ worth of living expenses can help keep you from racking up debt. If your car breaks down, the roof springs a leak or the furnace goes cold, you may be able to pay for repairs with cash rather than credit. Be sure to replenish the funds after you use them.
Set up direct deposit or an automatic transfer from your checking account to make saving effortless. If you don't already have one, you can open a Rockland Trust Checking or Savings account online today.
5. Invest for the future
Big, long-term goals like a comfortable retirement or a college education for your children require a careful investment strategy. With more than 7,000 mutual funds and hundreds of exchange-traded funds to choose from, to say nothing of untold thousands of individual securities, enlisting the aid of a professional who can sort through it all is a smart way to invest.
A Rockland Trust Financial Planner
can help you reduce anxieties about your finances and replace them with a sense of control. And that can help you keep your resolutions.