Financial Resolutions for the New Year

By Lynnette Khalfani-Cox, The Money Coach®

As the New Year unfolds, you may be ready to make some fresh money resolutions to get your financial house in order. Whether you want to save more money in 2019, get your budget on track, or improve your credit score, now is a great time to set some clear goals and start creating a stronger economic future.

Here are some tips for the New Year to help you achieve three important financial resolutions.

Financial Resolution #1: Saving More Money

When a New Year begins, many of us have the best of intentions to save more money — whether it’s saving for retirement, building a college fund, setting aside funds for a vacation or simply establishing an emergency cash cushion. Whatever your goal may be, the key to making this resolution stick is to set an exact target of how much you want to save, and then create an action plan to get there. The action plan should turn your dream of saving into a SMART goal; that means your goal is Specific, Measurable, Actionable, Realistic and Time-Bound. Merely telling yourself that you’re ‘going to save money’ isn’t going to change your spending habits.

Instead, write down your savings goal. Do you want to save $50 a month, $500 a month or some other amount? Now, look at your expenses.  You’ll need to get into the habit of tracking all of them to save money. If you don’t know how much you’re spending on your bills and necessities, as well as everyday purchases and discretionary items, it’s easy to push saving money lower on the priority list. After all, if you don’t have anything left over at the end of the month, what are you going to save?

In addition to tracking and documenting everything you spend, it also helps to review your bank or credit union statements for online charges or recurring monthly subscriptions. By taking these steps, you’ll have clarity about your finances, and you can prioritize your spending so there’s room to put more money away into savings. A great resource for building wealth and saving more is

Financial Resolution #2: Reducing Debt

Tired of living paycheck to paycheck? I’ve been there too. But I can tell you from experience, being cash-strapped and mired in debt doesn’t have to become a permanent way of life. In my mid-30s, I paid off $100,000 in credit card debt in just three years by getting aggressively focused on eliminating debt once and for all. Some of the tactics I used were to prioritize my spending, create and stick to a realistic budget, and use income tax checks and job bonuses to pay off debt quickly.

If you’re deep in debt, you can become debt free too. But you’ll need to be ready to make smarter choices, maybe even tough choices, about how you spend your money. In my case, one tough choice I made was to take my two older kids out of a pricey private school, which I couldn’t afford back then, and put them in public school. It turned out to be a great decision: both of my children thrived in public school and my family saved a fortune on tuition too! The kids went on to be high-achieving public school students and got into great public colleges as well.

If you’re serious about reducing your own debt load, you can make that debt payoff a priority with a financial makeover of your own. A key strategy: start doubling or even tripling your minimum credit card payments. If that’s not feasible, just pay whatever extra — above your minimums — that you can afford. As you get more comfortable paying larger amounts towards debt balances each month, you’ll see that balance dwindle down to a more manageable amount quickly. I won’t lie — it’s definitely challenging getting started, but once you start making progress, you’ll see how motivating it is to keep going until that debt is complete paid off!

Using tax refund checks, freelance income, gift money you may receive, or any “extra” income generated to make larger credit card payments is another smart financial move. For additional tips, I share more of the specific strategies I used to get out of debt in my New York Times bestseller, Zero Debt: The Ultimate Guide to Financial Freedom.

Financial Resolution #3: Improving Credit

 Having a low credit score can hurt you in many ways. You’ll end up getting approved for credit at higher-than-average rates or might be denied altogether. Having bad credit can also prevent you from renting an apartment or force you to pay higher deposits on things like cell phone service and utilities. In short, a poor credit rating costs you money. If you’re ready to do something about your credit score this year, begin by getting a free copy of your credit reports from Review each report —  from Equifax, Experian and TransUnion — and make sure they are free of any errors. If you do find a mistake, dispute that incorrect information with the credit bureaus.

Your credit score is calculated based on several factors, including how much credit you have available compared to how much you’ve used. So if you’ve been a heavy credit card user, the New Year is a great time to pull back on your plastic usage and rely less on credit cards.

When I was deep in debt, it took being cut off from creditors — yes, creditors shut the door on me by declining my requests for new cards and credit line increases — to make me change. Once I had maxed out my credit cards and couldn’t get any more credit, I realized I had to get my spending under control. So I did. I also negotiated with my creditors to lower my interest rates and I used every bit of extra cash I could to pay off debt. All of these steps collectively helped raise my credit scores over time. As of this writing, I’m proud to say my credit score is currently 804. (FICO scores range from 300 to 850).

If you’re paying high rates on your credit cards, be sure to check with your local SchoolsFirst Federal Credit Union branch see if you qualify for a lower rate card or a personal loan; both options can help you get out of debt faster and boost your credit scores.

A final way to boost your credit score is to make sure all your bills are paid on time. Mark the days before every due date on a calendar or set up auto-pay on all your accounts so there’s never a missed payment. Another one of my books, Perfect Credit, gives you more detailed advice for improving your credit health.

Doing some financial planning at the beginning of the year is a great way to get your financial footing — especially if you overspent during the holidays and are now trying to regroup. But by using the tips above, you’ll get your financial house in order for 2019, and future years to come.



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Extra Credit provides general information to help improve our Member’s financial lives. Every situation is different, so please contact us for guidance on your specific needs. The advice provided in Extra Credit is not intended to serve as a substitute for speaking to a loan representative, financial advisor, or BALANCE counselor who can help tailor a solution for you.



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