New Year, New Finances
Financial resolutions are at the top of many lists this New Year. Along with fitness, financial goals are some of the most common resolutions for Canadians. From cutting spending to saving more, there are always ways you can improve your financial situation. For those who are overwhelmed with debt, there are many ways to gain control of the situation. Alternatively, if you are comfortable with your financial situation, there are also ways to increase your savings and make better use of your money. Here are eight resolutions that can help beginners and seasoned-savers alike:
Start following a budget
The first thing you need to do is create a budget. Make sure you know exactly how much money you make each month. From there, you must track your expenses and identify where you spend your money. Once you can see exactly how much you spend on morning cups of coffee, clothes, fast-food delivery, and other unnecessary expenses, it makes the situation much more real and tangible. The simple act of gathering your financial information and making a budget can give you a sense of control over your finances, and it is the first step to achieving your financial goals.
Keep track of your credit score
For those who use credit cards and have loans, it is important to get our free credit report to make sure information is current and accurate. This will have an impact on the interest rate of every loan you ever receive, and a low credit score can even prevent you from securing a loan. Bt requesting that the two main credit bureaus for Ontario, Equifax and TransUnion, provided you with your fee report you can prevent any errors that could affect your score.
Explore debt consolidation
If you are stressed by your debt and have trouble keeping up with the payments and understanding your bills, debt consolidation can help. Rather than paying many creditors, you will only have to pay one loan, with one interest rate. There are a variety of debt consolidation providers that can help manage your debt, but be sure to find one with an interest rate and monthly payment that will be comfortable for your financial situation.
Cut all unnecessary spending
Take a hard look at your budget and cut any unnecessary spending. From meal preparation to public transportation, there are a wide variety of ways to cut your spending, and all of the savings can be applied to your debt. The more you cut, the faster you can get out of debt and start saving.
Pay your high-interest debt off as fast as possible
Credit cards can have interest rates as high as 20% or more and payday loans ar even higher. It is important to pay off high-interest, unsecured debts first. By cutting your spending in the short term, you can eliminate this debt faster. Once it is gone, you will have much more financial freedom without being burdened by high minimum payments. If your credit card has a balance, paying it off should absolutely be a New Year’s Resolution.
Create an emergency fund
An emergency fund is an account that has three-to-six month’s worth of expenses available for you in case of an emergency. If you lose your job or need major repairs on your car, this account can offer you the security and peace of mind that comes with knowing you can afford such an emergency. By setting this as your New Year’s goal, you are investing in something that can actually prevent stress, improving your day-to-day quality of life.
Start saving for your next big goal
Whether you want to save up enough to travel the world for a year or to put a down payment on a house, it is important to set financial goals. Once you understand your finances, it is much easier to commit to a goal. Save up a specific amount each month, and prioritize these savings over impulse spending. The feeling of reaching your goal can even have a positive impact on your mental health. Once you are comfortable with your financial situation, these more expensive goals become possible.
Increase your earnings
No matter how much you save each month, your savings can always increase if you make more money. Consider investing in your own education or paying for courses to develop your skills so you can earn a higher wage. The most effective way to increase your long-term savings is to get paid more, so investing in yourself can be a great option for reaching your financial goals.
Achieving your Financial Goals
Financial struggle is one of the top causes of stress in the lives of Canadians. It can be an emotional topic, and one that many do not want to talk about. Being honest about your financial situation is an important step, especially if you are in debt and struggling with your monthly financial commitments. For those who are in significant debt, creating a financial plan can help alleviate some of the stress, but it is important to reach out to a Licensed Insolvency Trustee before it is too late.
At Kevin Thatcher & Associates, we understand that your financial well-being can be a confusing and overwhelming subject, especially if you are struggling with debt. We offer comprehensive financial advice for those in the GTA, Guelph, Kitchener, Cambridge, and Hamilton, who are exploring debt consolidation, bankruptcy, and other financial avenues. We will work with you to come up with a strategy that will allow you to pay off your loans while still being able to afford your monthly living expenses. However, it is crucial that you seek out financial assistance before you start missing payments and your debt becomes too overwhelming.