Your Top Money Goals for 2016

Can you believe we are already near the end of another year? Before you know it, the new year’s bells will be ringing! If you are looking to have your best year EVER, a great place to start is with your finances. The bulk of the decisions that we make throughout the year affect our finances in some way and quite often our financial situation can dictate whether or not we have a good year or a bad year.

Taking the steps to improve your financial situation can be overwhelming but not if you know where to start and have a plan. Take control of your finances in 2016 by following these 10 simple steps….

1) Create a budget

We’ve said it before but creating a realistic budget is one of the best things you can do to improve your financial outlook. You can’t know where you’re going until you know where you’re at. So take the time to track all of your income and expenses and use that information to create an annual budget that you can follow. When creating your budget, be on lookout for ways to “trim the fat”. For example, can you reduce your phone bill by changing rate plans or can you cut out the daily Starbuck’s run and make coffee at home instead? The difficulty in creating a budget is balancing your income with your expenses. The key is to bring in more than you spend. Sounds like a simple principle but it’s not always that easy and you may have to spend some time working on your budget until it makes sense for your family. Fortunately, thanks to technology, this process is easier than ever and there are numerous free and low cost apps that you can use to both track expenses and create a budget.

2) Adjust your exemptions

This can be a tricky one and if you are unsure or have a special situation always consult a tax professional before making major changes. However, if you are one of the fortunate taxpayers that consistently receive a state and/or federal refund each year, you may want to consider adjusting your withholding exemptions so that you take home more of your paycheck – instead of waiting for next year’s refund. Take this a step further and invest that “found” money into your savings, college, or retirement plans all of which have various tax benefits of their own. You won’t miss the money since you never had it and you will thank yourself when you need it in the future.

3) Reevaluate Benefits

Before checking off the box to keep your benefits as is during the next open enrollment period, take a few moments to review your benefits. You may be able to find lower cost options that meet your needs or maybe even a plan that has added features. This is an especially good idea if you have had a qualifying life event since the last open enrollment period. Events such as birth, death, or a dependant that is no longer eligible for benefits under your plan. All of these factors can affect your plan premiums.

4) Life insurance

This is a subject that no one wants to think about – until you need it. It is wise to have a life insurance policy and a written will or living directive for each person in the home. Each person’s policy should be enough to cover their outstanding liabilities AND burial expenses.

5) Save Save Save

For people working on improving their financial situation, this can be one of the biggest challenges they face. It’s a challenge to save money when there doesn’t seem to be enough each month for what you need. If you can’t devote a set amount each week or month to your savings plan, get creative. Host a yard sale or sale your unwanted items at consignment and use that money to jump start your savings account. Anytime you find money or receive it for gifts, put a portion in your savings. Get a 3% raise at work? Put it in your savings. The more disciplined and committed you are with this the greater you will see your savings grow.

6) Pay bills on time

Late payments are one of the primary factors that affect your credit score. One way to combat this is to automate bill payments for things like credit cards, loans, and utilities. Not only will you help your credit score but you will also save yourself tons in late fees and interest charges. If automating is not an option for you, use a calendar to track payment due dates and set reminders so that payments are made in a timely manner. Be sure to communicate late payments with creditors and always do your best to stick to payment plans offered by your creditors.

7) Debt plan

This should be done after you have created your budget as you will need to know your income and expenses for each month in order to create a debt payment plan. What typically works best is paying off your debts from smallest to largest. This is because since smaller bills are easier to pay off, you will see immediate improvement in your debt payment plan and this will be a great motivator to continue your hard work.

8) Chronicle your efforts

Sticking to a goal is always much easier when you are held accountable for your actions. Therefore don’t be shy about talking about your financial plan. Chances are many people you know are doing the same thing and they may even learn something from your strategies. Don’t be afraid to journal about your plan or even create an online blog or Facebook group to share your journey.

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10) Know your credit score

As a child, I had no idea that a simple three digit number could hold so much power in my adult life. But that three digit credit score can mean the difference between financial stability and freedom or financial ruin and stress. A good credit score is imperative in today’s market to obtain things like employment and home loans. It is important to know your score and whether or not there are opportunities for improvement. It may be wise to hire a credit repair specialist to help with this but beware of companies that make promises in regards to your credit score. Be sure that the professional that you choose is licensed, insured, AND bonded for the state(s) in which they do business (Rescore, LLC is licensed, insured, and carries a surety bond in the state of Maryland).

If this process seems to overwhelming for you or if you are not sure where to start, we can help! Contact us today at 410-833-3939 or at info@rescorecredit.com to find out how we can help improve your credit scorelegally.

Celebrate your financial successes and learn from the failures. Don’t give up, your dreams are within your reach!

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