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New Year's resolutions come and go every year. When it comes to resolving to get their finances in shape, the five resolutions should not be ignored.
Year after year, resolutions come and go. Fitness centers see an immediate increase in activity in January that the masses decide that now is the time to finally get in shape, but as usual, as soon as the resolution is worn. As the credit card bills start arriving in late January, New Year is committed to improving the finances to give way to a feeling of hopelessness. How can you expect to succeed when you're drowning in debt?
This year, be proactive and forget the "all or nothing" New Year's resolution.
Instead of jumping on a rigid regimen of five days a week gym, take steps to improve their health by choosing realistic and achievable goals. You know I went overboard with their holiday spending and you know that the bill credit card that comes is a lie. Get ready. Instead of allowing the bill to weaken his will to improve their finances, use it to motivate.
Resolve to improve your finances is smart, but it is action. Just type "improve finances" in a list of New Year's resolutions is not enough. Just as you should exercise and eat less to lose weight, you should also start to get your finances in shape.
Although there are dozens of steps you can take to improve its finances, the following five resolutions are the ones you cannot afford to neglect. The first two resolutions of steps you can take right now, while its determination is in full swing. Spending a few hours in these and you'll only have three steps remaining to be considered throughout the year.
1. Write your will - Consumer Reports estimated that almost 66% of people do not have a will. Even if you do not have much of the estate, write a will is important, especially if you have kids. Who do you trust to appoint a guardian for your children? A will is a tool that can be used to appoint their own guardian for your children and designate the distribution of its assets. If you die without a will, the state will determine who gets what and who will care for their children.
Writing a will is simple and not as depressing as you might think. In fact, it is empowering, because they are taking charge of a situation according to your wishes. Many software programs are available to assist in making a simple will that is completely legal in your state.
2. Review your insurance - If your house were to burn tomorrow, do you have enough insurance to fully rebuild, replace all its contents, and provide for temporary living expenses in the meantime? Are you sure? If you were to walk into a car accident with a car of high-end luxury and that was your fault, you have enough insurance to cover the cost of repairs? Do you have enough life insurance to provide for your family if you die unexpectedly?
Check out all your insurance policies and make sure you have adequate coverage in all areas. As you progress through life, your insurance needs change is why it is important to review your coverage periodically. It is possible that you may reduce the coverage in some areas or may have to increase by another depending on how your situation has changed since the last time you reviewed your policies.
While you're at it, make sure to double check that the beneficiary of each policy. Is this person still alive? Is this the person you wish to receive the funds if I die? Many people forget to re-designate the beneficiary after a divorce.
3. Start saving now - Do you have a retirement plan or IRA? If so, is contributing the maximum amount? If not, increase your contribution. You will feel a pinch at first, but soon you get used to it, especially if you can have your contribution made directly from your paycheck.
If you do not have one, open a Roth IRA and set up automatic contributions to the annual limit. The earlier you start saving, the more you can take advantage of compound interest.
Do you have an emergency fund? What would you do if you suddenly lost your job?
How to pay the bills? What if you need a new furnace in the winter? How will you pay? An emergency fund gives you peace of mind and the funds can be used in an emergency affects your pocket. Also, instead of paying interest for the use of a credit card, your emergency fund can earn interest if placed in a high interest savings account.
4. Reduce your credit card debt - Check out the life of a bill credit cards, including the line detailing the finance charges. How much money is paying for the convenience of instant gratification? As long as you have an outstanding balance, you will be paying finance charges each month. Now look at the minimum payment. It can be surprisingly low, in contrast to the amount you owe. If you are in the habit of paying the minimum payment, you will never succeed.
Time to break the control of the credit card company has on you and start paying your credit card balance. In fact, if you are paying double digit interest rates is in your best interest to put as much money as you can to pay their credit cards.
In addition to paying the balance, a crucial step in reducing your credit card debt is to stop using the card in the first place. This means delaying gratification. However, those black leather boots are so cute! Not so fast. They're cute, but ask yourself if you are willing to borrow for them. If they are simply a must-have item, try an old-fashioned approach: save for them.
5. Improve your credit score - People with bad credit pay more for loans, but did you know that your credit score is used to determine rates of others? The insurance industry uses credit scores to determine the amount to collect the insurance. If you are struggling financially and have a low credit score, you will feel the pinch even more in higher insurance rates. In addition, employers also look at credit scores in evaluating candidates. Credit scores are used as an indicator of their responsibility. If you cannot manage their finances, how will you manage the rights of others? Now, not only are suffering financially and paying high insurance rates, we'll have a difficult time getting a better paid job!
You and your financial situation in the future a favor by working to improve your credit score. Pay your bills on time religiously. Do not apply for store credit only get 10% discount for once. Pay your credit card balances.
If you go to the gym this January with a fresh solution to get in shape, they fully expect to hear the coach says "no pain, no gain." The same thing happens as you work to fix your finances. It will be painful. You have to make sacrifices in the way it spends its money. But as you're willing to sweat for a few hours each week, if you put your mind to it, you can take charge of your finances.