OK, 2013 is here and, frankly, January is almost over so you’re already late if you want to get your finances in order for the next 12 (wait, 11) months. It’s OK though as long as your plan is to get things straight now. Actually it’s really never too late to start so don’t be down on yourself. Read below and see our ‘to-do’ list for help. We made it just for you!
We’ve said it before and we’ll say it again; if you don’t have a household budget it’s time to make one. Use the receipts and bills from last year as your basis, try to factor in as many unexpected expenses as possible (car repairs, travel, etc.) and by all means make sure that everyone in the family stays on track. It will pay off, we promise.
Reducing your debt to 36% of your income or less is vital to keep your financial house in order. Included in this is your mortgage, a bill that usually east up about 25% of your household income if not more. What that means is that, in order to get to the magic 36% (or lower) you’ll need to bring your other bills down, like car payments, credit card balances and student loans, among others.
Don’t look for ways to save, look for ways to not spend. Seems kind of obvious but, if you really make an effort to not spend your money you’ll find that you will save much more of it. Whenever you make a purchase, even a small one, ask yourself if you really, truly need that thing. The fact is, most of us have tons of extra junk that sits and collects dust so why add to it?
Look for secondary streams of income. If you need to pick up a side job then do it. If you can make some money online at home do it. If there’s an opening for 1 day a week to tutor, teach, wait tables, deliver pizza or whatever take it. You’d probably spend that time watching TV anyway so why not use it to make a few extra bucks and pay down some of that debt?
If you’re looking to buy a home this year (or someday) start saving for a down payment. Yes you can certainly buy a house with 5% down but you’ll get better rates and have more choices if you can put down 10% or more. If you can put down 20% you’re golden!
Stay with your job as long as you can. The fact is, if you are looking for a mortgage or even a car loan the longer you’ve been at a specific job the better your rates will be.
How’s that for a great to-do list? We hope it helps and we invite you to check back for more great info regularly as we’ll have it for you. Have a great year!