Tips for Getting Your Finances in Order

So we find ourselves celebrating a new year and many of us have already been working on our New Year’s resolutions. Losing weight and becoming healthier is usually one of the most popular resolutions and an important one. But maybe working toward a healthier financial life should be just as important and actually a priority for all of us in the new year.

Many people struggle to find extra money to help them get ahead. And, figuring out how to improve finances may be a daunting task, because some people live from paycheck to paycheck. This makes it even harder to figure out how to get a head. So, we’re putting together some tips for anyone who would like to get their finances in better shape this year.

Check Out Our Easy Tips:

Gather: The first thing you need to do to reshape your finances, is to pull together a list of all your debt (including balances, minimum payments and the current interest rate). A good place to start would be pulling all your recent statements together, so you’ll have access to all the information you need. Plus, you’ll also be able to assess your spending habits to determine where you might be able to save in the future.
Review: This would also be a great time to pull your free credit report to carefully evaluate your credit history and current debt and payment history. It will help you compile all your debt to compare to what you pull together, but be sure to dispute anything that doesn’t look right. All you have to do to request your free annual credit report is visit annualcreditreport.com, or visit each of the credit bureaus: transunion.com, experian.com and equifax.com, so that you can compare each of them to ensure that everything on the report is accurate and accounted for in your research.
Evaluate: Now that you have pulled together all your expenses and debt, it’s time to seriously evaluate your options to see if consolidating your debt may be a good option to free up extra cash each month. Sometimes debt consolidation can be a simple option to help you pay down your debt and free up extra cash each month.

The Credit Union National Association (CUNA) maintains that debt consolidation could be a great way to get your debt under control, and there are several options for debt consolidation including:

Zero Percent balance-transfer credit card, transfer your debts to this card, and pay off the balance in full during the promotional period
Fixed-rate debt consolidation loan through your credit union
Use the equity in your home to pay off the higher interest debt with a low interest Home Equity Loan or Home Equity Line of Credit (HELOC) if you own your home and you have equity (which means your home is worth more than you owe on it)

There are also debt consolidation services and free resources available to help you consolidate your debt, to help you pay your debt off faster. But, CUNA says you should only consolidate your debt if you’re serious about getting your finances in better shape. If you plan on racking up more debt because you have access to the freed up credit – you should avoid the entire consolidation process. Debt consolidation should not be used to free up credit so you can put yourself in deeper debt, it should only be used to help you get out of debt.

There are additional options that CUNA recommends to help you find extra money in your budget including:

Refinancing your home, and maybe your car loans – if you can refinance at a lower interest rate and stretch the payments out, you can use that money that you save each month into paying down other bills, or putting that money into savings.
Also, revisit your current home and auto insurance policies – consider increasing your policy deductible to bring down the policy expense, and don’t forget to ask about good-student discounts for your kids.
Since you’ve pulled all your debt together, it’ll be easy to re-evaluate where you’re spending your money to look for ways to save. Perhaps, not eating out as much, or looking for better phone and internet deals. Re-evaluating your expenses could be a very simple way to find extra money in your budget.
Don’t forget there are very simple things that you can do to adjust monthly expenses and save the environment at the same time. That’s right, have you ever considered going green by using programmable thermostats, energy saving bulbs and window coverings. Maybe it’s as simple as signing up for electronic statements and auto-pay with your local credit unions, and even for some of your utilities. Some businesses will incent you for going green.

If you’re willing to do a little research and make a few phone calls, you will be surprised at how much money you can free up each month to help you pay off your debt and begin saving for the future.

Tips for Getting Your Finances in Order

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