Resolve to Get Your Finances in Shape for 2021
New Year Financial Goals!
The new year is the perfect time to have a fresh start and create new goals to improve yourself and your quality of life. When it comes to making a few resolutions, it's important to include your financial goals to ensure you obtain more stability and increase your net worth. If you want to make a few new year financial goals, there are a few ideas to consider. Improve Your Credit Score One of the best ways to have more financial opportunities is to increase your credit score, which can allow you to purchase a new car or apply for a home loan. There are many ways to boost your score, which will prove to lenders that you're financially responsible and capable of repaying debt. Start by paying off your accounts. Avoid closing any of the accounts after you pay them off, which can shorten the length of your score's history and affect your score. You can also review your credit report and dispute any errors that may be present. It's also necessary to keep your credit card utilization at 20 percent. You can also pay your bills on time and avoid applying for too much new debt. Save an Emergency Fund
It's important to have an emergency fund of $1,000 to ensure you have money available for any unexpected costs that arrive throughout the year. With an emergency fund set aside, it can help you avoid acquiring new debt when you have emergency car repairs or unexpected medical costs. Avoid touching the money for anything unnecessary, and repay the money as quickly as possible whenever you use it. Save Three to Six Months of Your Income Job loss can occur at any time, making it necessary to have a plan established to avoid getting behind on your bills, rent, or mortgage. It's not always guaranteed that you'll be capable of securing new employment quickly, making it necessary to have money saved until you find a new job. Although it can take time and energy to save extra money, it's possible by cutting out unnecessary costs from your budget. Avoid shopping, splurges, or taking vacations as you work towards your financial goal. You can also cancel your cable and cut coupons to put more of your money towards the fund. Financial experts recommend saving three to six months of your income to ensure you can keep up with your bills and avoid having your car repossessed or foreclosing on your home. Saving enough money can prevent you from rushing your job search and settling for a position you know you don't want. You can take your time finding new employment and can be more selective to avoid having to change jobs too many times. Pay Off Debt Paying off debt should be one of your first goals to ensure you can have financial freedom. It's important to pay off your debt to avoid paying interest rates, which can add up to hundreds of dollars annually. Start by paying off an account with the lowest balance, which will motivate you to repay the other remaining accounts. You can also transfer the debt to a new credit card that offers no interest for 12 to 15 months to avoid paying anything in interest as you work hard to become debt-free.