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The New Year isn't too far away, and it's a great opportunity to make a new start on all your financial goals. If you have trouble sticking to a budget, struggle with saving, or have several loans to pay off, now is a good time to recommit to making the changes you need to lessen your stress and improve your financial situation.
If it seems overwhelming, try focusing on one goal at a time. You'll be surprised by how drastically small changes can affect your life.
Update the family budget
When was the last time you went over your record of expenditures and income to make sure they're all up to date? It's good to do so every time you have a major life change — like relocation, new employment or birth — or every few months as seasons, interest rates, gas prices and utility bills change. Try to be as specific as possible in your budget. The more specific you are, the less likely you'll be to justify expenses that "kind of" fall under one category or another.
Identify a new source of income
Not enough money for your wants and needs? If you've updated your budget and realized you have more nondiscretionary bills than you have nondiscretionary funds, it's time to identify a new source of income. Can you find a higher-paying job? Get a second job? Go from part time to full time? Can you try a new source of self-employment that lets you work evenings or weekends?
Another option for income might be to liquidate assets. Do you have antique valuables sitting around doing little more than collecting dust? What about selling off an extra car or unused recreational vehicles? Do you have so much "stuff" you're paying a storage unit service to keep it out of the way for you? Sell what's in storage and you'll be earning and saving money at the same time.
Set a specific savings goal
Saving money is a great goal, but being specific will help you save even better. Erik Carter, senior resident financial planner at Financial Finesse and contributor for Forbes.com, says you should set SMART goals, an acronym he says stands for "specific, measurable, attainable, realistic and time-sensitive."
For example, he says, instead of setting the generic goal "save money," you should try something like, "save an extra $5,000 for emergencies by the end of the year." If that sounds a little daunting, try something more attainable, like saving $100 per month. You can always adjust your goals as your income and expenditures change.
Start your taxes early
Paying taxes early doesn't sound like an exciting goal, but it's a good idea. The earlier you get your taxes filed, the sooner you'll get your refund (if you're getting one). You'll be able to use those funds to pay off some debt, which means paying less interest, which equals saving money. If you wait to file your taxes, you might procrastinate too long. This could result in additional fees for filing late, or a last-minute decision of how to file, which might mean you end up incurring extra fees by whichever tax-filing agency you choose.
U.S. Money News says another good reason to file early is you'll lessen your risk of identity theft.
"The sooner you file your return, the less opportunity someone else has to file a return in your name," Joe Reynolds, identity fraud product manager at Travelers, told usnews.com.
Consolidate your loans
If you've got several loan payments to worry about, it can send your stress levels soaring. You can lessen that stress, and possibly the amount you pay each month, by consolidating them into a single loan. Finaid.org says this is a good idea for a couple of reasons. For one, you're less likely to miss a loan payment because you don't have several payment dates to keep track of; you just have to pay one time per month.
You could also gain access to alternate repayment plans, "such as extended repayment, graduated repayment and income contingent repayment." Another benefit is the ability to switch lenders when you consolidate. This could give you access to better interest rates or fee rebates.
Deseret First Credit Union has a debt consolidation plan that transfers balances—from credit cards, medical bills, etc.—into one low monthly payment, making debt more manageable and decreasing financial worry. Gain control of your debt today by consolidating with Deseret First Credit Union.
Call 801-456-7000 or 1-800-326-3328 or visit www.dfcu.com for a free analysis of your current financial situation.