Budgeting
Financial Tips for the New Year
Let’s face it: the pandemic has really hit hard. Many people have been affected in one way or another. However, it’s also been a chance for people to strive to plan better for the year ahead. This article will delve into financial tips for the new year to get 2022 off to a solid start.
Start with building a budget
Budget building is an essential part of financial stability throughout the year. It determines what, why, and when you spend. Even on a low income, budgets are a must to maintain a debt-free life.
A budget includes income and expenses, debt repayments, debit orders, and savings. Building a budget can be fairly simple. Sticking to your budget is another story. When surprise expenses arise, it’s hard to stick to a budget. Birthday parties, medical bills, and anniversaries tend to drain our pockets.
So it’s important to have a backup plan. This could be as simple as cash stuffed under a mattress, to help you avoid blowing your budget. But learn to maintain and manage your budget too. Do this by keeping track of how you spend and where most of your money goes.
Get rid of your debt
Nothing ruins a budget more than unpaid debt. Unpaid debt grows and costs us much more in the long run. We can pay off the debt in several ways. How you pay off your debt will be entirely up to how you want to set up your budget.
There are two different ways we can pay off our debts. One is called the snowball method, and the other is the avalanche method.
- The snowball method is where we pay off our smaller debts before attending to the bigger ones. This way, you can decrease the number of debts you have but not necessarily how much debt you have. This option will cost more in the long run.
- The avalanche method pays off the loans with the highest interest rate first. This tactic means you make the minimum payments on all of your debts and pay extra to those with higher interest. This option will save money in the long run.
The last tip for any kind of debt management is to pay your bills on time. Late bills incur penalties, and penalties end up costing more money. We don’t need to pay more than we have to.
Improve your credit score
The key to having the best score comes down to knowing your budget, paying your bills on time and being mindful of credit utilisation. Manage that correctly, and you’ll stay in the green and be financially fit all year round. Read more about improving your credit score here.
Save, save, save!
Like anything, we need a plan to save. We cannot save more than our budget can handle. We have to prioritize saving for what’s important to move towards our goals consistently.
So a savings plan will help guide you on the best route to take. People save money in many different ways. Some will consistently save small sums, some large sums once in a while, and others will mix the two.
At the end of the day, how you save depends on your budget and how well you manage it. But remember, a savings plan must have specifics: what you’re saving towards, how you’re saving towards it, and a set timeline. This will help you figure out the best plan of action and keep you focused on getting to the goal.
Money makes the world go round
The reality is, our lives revolve around money. We simply cannot live without it. If you find yourself in a sticky financial situation, we’re here to help. If you need a quick, easy and affordable loan, Credit24.com.au is here to assist with loans of up to $10 000 to make cash flow a little easier for you.
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