Welcome in the New Year with a New Attitude on Spending
We all begin talking about “trimming the fat” when the New Year rolls around, but perhaps you can begin thinking about “trimming the fat” in terms of your finances. Make this the year you establish a healthy relationship with your finances and begin to really understand the benefits and satisfaction that come along with handling your money and your budget well. Here’s how to make 2011 the year you finally break yourself if all those poor financial habits and decisions:
- Make a realistic budget – We all make budgets, but how realistic are they, really? Instead of making a budget that you know in your heart and your head just isn’t going to translate well into real life, take everything into consideration so that you have a better chance of pulling it off. For example, if your budget leaves no room for discretionary spending, and you have nothing left over at the end of the month for a birthday present or a new outfit, then you’re bound for disaster. Instead, pad the budget for living and take it from there!
- Examine your needs versus your wants – One of the ways we get muddled in terms of finances is because many of us have blurred the liens between wants and needs. Let’s get one thing straight: your morning latte is not a need! Does that mean you should deny your latte cravings? Perhaps not; but it may mean that your once-a-day latte run can be cut down to a three-day-a-week run.
- Consider repayment terms and consider consolidating – Take a look at your current credit card bills and installment loans and pay close attention to the repayment terms. You may be better off consolidating all of those bills onto a fixed, low-interest-rate credit card as to simplify your monthly bill payments. Putting all those bills onto one card may facilitate the process of paying bills and may make it easier to look at the “big picture” when it comes to paying down your bills.
- Reexamine your current credit cards – Don’t forget about your credit cards and make sure they are still working for you in terms of interest rate, rewards and other terms and conditions.
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