When the new-year begins, usually the resolutions start and end with personal fitness. Gym membership applications are at its peak in the beginning of the year, and by spring or summer, the crowds have faded. Instead of focusing only on fitness, try to look to help boost your own personal finance this year that will lead to many years of available funds to enjoy in your later retirement years.
Set Up an Emergency Fund
Experts have long advised to make sure you have at least three to six months’ worth of expenses in an emergency fund account. This will give a little bit of a cushion should you have unfortunate job-loss, an unexpected appliance or auto repair, and a comfort so that something suddenly comes up, you can avoid putting on a credit card and get into debt. You may be staying afloat now, but if you do not have the cash to pay for a new expense, then the credit card interest will begin to pile up.
Maybe you are having trouble making ends meet, or just want to give your income a boost to save up for a trip or start contributing more towards a savings account, now is as good of time as any to increase income. At work, you are probably about to have your annual performance review with your employer, so ask for a raise. If you are looking for another opportunity, then a second job may be the answer to spend a few extra hours a week earning extra income. If you are looking for quick cash, try selling items online that are only collecting dust at home.
Review Contributions to Savings
As we get older it will be more and more important to make sure there is a nest egg for our golden years, so each year you should reevaluate to ensure its optimization. For a 401(k) account, take a look to see if your company matches, to at least make sure that is being used at full potential, otherwise there could be money left on the table instead of piling up in your account. For savings, direct deposit straight to the account will help avoid any manual transferring, or lack thereof.
Minimize Interest Payments
Whether you are carrying a credit card balance, have a personal loan, or even a mortgage, it is always best to ensure that you are paying the least amount of interest possible. Obviously paying off debt is the priority, but in the meantime, if a balance transfer is necessary to get a promo low interest rate to help pay off the balance, it is worth the savings. Mortgage rates change throughout the year, so keep a close eye on rates to see if they drop enough below your current rates to justify the closing costs it would take to do a refinance. If you plan on staying in the home for a while, any lower of an interest rate will add up to huge savings over the entire loan.