The end of the year is only a few days away. Now is the time to think about ways to improve your fiscal outlook for the coming year. In these times of financial hardship, it is especially imperative to watch every dollar and get the most out of your money. These simple rules will help in developing healthier financial habits for a more prosperous 2012.
We can’t get to where we want to be without setting a course. Sit down and write out exactly what you want to achieve financially for the year. Try to be as specific as possible. Then determine ways to achieve those goals and work toward it with specific actions every month. Couple these goals with a solid budget and a strong regimen of savings, and your next year looks richer already.
Check your credit score
Many websites offer free credit reports. These reports are used by banks and credit card companies and even some employers to determine your creditworthiness. You are allowed one free report from each of the three reporting bureaus per year. Check it for mistakes that count against your score. Experts say up to 70 percent of credit reports contain errors that can be fixed.
Create a budget
Get your bank and credit card statements for the last three months. Sit down and carefully figure out where your money is going. Categorize your expenses by different types, such as utilities, entertainment and transportation costs. Determine which things you can cut back on and which ones you can’t. Determine affordable monthly allowances for each category, and stick to it. Don’t forget to leave some room for savings.
Start an emergency fund
Life has a way of slamming us with unexpected expenses at the most inconvenient times. A savings account or a money market fund will save the day during those times and keep us on budget. Try to put a little into the fund from every paycheck or source of income.
Chip away at debt
If past debt is an issue, talk to your debtors and see if they can’t be refinanced or reduced. Then, as part of the monthly budget, put something toward your debts every month. Old debts, like student loans and credit cards, will grow and overwhelm you without constant diligence. And, if possible, get rid of those credit cards next year.