The New Year is time for many things – setting new goals for health and perhaps a few projects around the home to complete. New Year’s resolutions may also include financial decisions. For many people, making changes to financial habits takes time and consistency. The New Year may be the ideal time to make these financial resolutions as it provides an opportunity for you to finally get on track to achieve your goals right at the start of the year.

Where to Start with Your Financial Resolutions – Set Some Goals

Reset your personal finance goals each year to ensure they continue to meet your specific needs and long-term objectives. It’s a good idea to take several steps to find out what’s next for you. Set some goals.

• Start by looking back over the course of the last year. What could you do better?
• Think about where you are in your retirement planning or other long-term financial goals. What should you change?
• Consider what debts you have now and how you may be able to pay them off sooner or refinance them with better terms.

As you think about the year coming, consider what objectives you have to see significant improvement. That may be increasing your income as well as reducing your expenses. When you take a long, hard look at your financial health, you may be able to pinpoint specific goals for the year to come.

What Types of Financial New Year’s Resolutions Are You Making?

There are numerous ways you may be able to change up your personal finance management this year to see changes in your long-term goals. Here are some recommendations to help you get started.

#1: Start a budget

It’s not always the first thing people want to do because a budget sounds hard and time-consuming. It does not have to be. In fact, it may be one of the best ways for you to know how to move forward in understanding your use of money. Track all your spending over the last few months. Determine where you are spending your money and create a budget that fits within those goals. The key is to make sure you’re not planning to spend more than you bring in.

Here are a few tips:

• Set up an emergency savings account. Make sure you are paying yourself first out of your paycheck into this account or another savings option to help reduce dependency on credit.
• Consider how much you spend on things you do not need, such as subscription services you don’t really use but pay for each month.
• Be sure to factor in costs that are not always monthly such as birthday gifts.

#2: Consider opportunities to lower your expenses

One of the ways to balance your budget is to be sure you are not overpaying on your expenses. That means taking a closer look at what you are spending and determine if it is really is the right investment for you.

You may be able to reduce your cable bill, for example, if you are no longer using cable because you are using streaming services instead. You may be able to cut down on your hot water bill if you lower the temperature just a bit (while keeping it within a safe range).

Look at all of your expenses this way. If you are spending $200 a week on groceries, consider what you may be able to do to bring that down to $180. Or, if you are eating out three times a week, create a plan to keep you at home for meals more often.

Lowering your expenses puts money into your pocket that you may be able to use for many other things. That may include paying down debt or building up your savings.

#3: Consider options for reducing your car payment

Take a look at your existing car loan payment. Are you making payments each month that are just too high? Look at the term to determine how much longer you have to pay on your debt. Consider the interest rate on the loan. Do you qualify for a lower rate, potentially?

Another option is to consider that your high-valued car is an investment. As an asset, you may be able to cash out some of the value of the car by refinancing your car loan. That’s an option for many people who have a vehicle that may be almost paid off that’s still worth a significant amount of money.

Here’s a tip. RefiJet offers free, no-obligation quotes for auto loan refinancing. You may be able to qualify for a lower monthly payment, a lower interest rate, or a cash-out refinance to put money in your pocket. It’s an easy way for you to find out if you may be able to manage this monthly debt as part of your financial plan. RefiJet’s auto refinancing experts provide personalized support throughout the process.  If you think you might benefit from refinancing your vehicle, get started now!.

#4: Tackle your home loan next

Along the same concepts as refinancing an auto loan, you may be able to focus on reducing your home loan debt as well. As potentially your biggest asset (and your largest debt in most cases), it is critical to make loan repayment a focus of your financial plan and your financial resolutions. Here are a few things to consider.

• Are you getting the best interest rate on your home loan? A lower interest rate could shave thousands of dollars off the cost.
• Has your credit score improved since you obtained your loan? If so, you may qualify for a lower interest rate, which may lead to money saved if you refinance.
• Are you paying as much as you possible on your loan each month? Did you know if you make half of a monthly payment every two weeks, you’ll make an extra payment each year? Consider adding to the amount you pay each month to lower your debt faster.

Paying down your home loan balance may be a wise financial move because it may save you money over time. If you need to tap into a loan later, such as to consolidate debt, a home equity loan may be one of the most affordable options available to do that. You may be more likely to do that with a lower balance on your home loan.

#5: Take a good look at your overall debt

Debt is expensive, even when it comes to low-interest rate loans. It is always best to pay for what you purchase at the time of that purchase using cash. That’s not always possible.

At the same time, using credit may also help you build your credit score. It’s important to find the balance that allows you to build credit properly without any risk of overusing it, so you are not struggling to make payments. Where do you start?

First, document all of the credit cards and other loans you have. Then, write down what you owe on them, the interest rate on the loan, and the minimum payment. Then, consider if you need to get aggressive at repaying your debt.

• Tackling the largest interest rate debt first can be a good strategy. Then, move on to the next loan.
• Another possible strategy is to tackle the debt with the lowest amount due and work to pay it off first. Then, once you finish the lowest debt, move on to the next one. Doing this may help you feel a sense of accomplishment and help you get out of debt by simply staying on track.

It may also be possible to consider a debt consolidation loan. This may allow you to take out a larger loan to pay off all existing loans. However, if you do this through any method, be sure you are getting the lowest interest rate possible. That is going to help you potentially save money on debts overall.

#6: Check your credit report

How does your credit report fit into improving your financial health? In short, what is on this report creates numerous opportunities for you, or it may create obstacles to your future success. If you have not done so yet, request a copy of your credit report. You are eligible for a free credit report from each of the credit bureaus every 12 months. You may be able to access these through AnnualCreditReport.com, a federally-regulated site.

You may wish to use a variety of the free credit tools available onlineand through your bank app to help you to secure a look at your credit report. Some also provide a copy of your credit score. Also, check your credit card companies. Some provide a free FICO score each month. That may give you some insight into what to expect the next time you apply for a loan.

However, take a closer look at your credit report and its details. Here are some things to consider:

• Are all the accounts yours? Be sure that you do not have any accounts that are not your own or those that may have someone else’s contact information on them. Take a close look at this information to be sure no one is using your personal information to access credit.
• Are the details of your accounts accurate? Be sure that any reports of missing payments or over the credit limit claims are authentic. If they are not, they could be hurting your credit score.
• Take action to report any information to the credit bureaus that is not accurate. That may help to ensure that your information is accurate.

Your credit report is a valuable tool in creating your financial picture. Knowing your credit score may be helpful as you apply to new loans or consider refinancing. At this time of the year, make sure you’re making purchases and paying off debt in a way that’s going to benefit your credit score in the long term.

New Year’s Resolutions to Build Wealth

Reducing your costs and keeping your budget in line with your goals are important steps. However, it is also important to work to build your wealth. Therefore, having some financial resolutions that help to make that possible is essential in the coming year.

Emergency financial savings

If you do not have one yet, work to build up an emergency savings account. The idea is to have funds that you would only use in an emergency, such as when you need to get repairs on your car so you have reliable transportation. An emergency fund like this may help to reduce your risk of needing to turn to credit to pay down your debt.

Automate your savings

If you have a bank account in place, create a savings account that allows you to move some of your paycheck into savings each time you receive it. Some banks allow you to set up an automatic deposit which puts a specific amount of money you determine into your savings account whenever you receive payment.

Set up a retirement account

If you do not have one yet, determine if this is the year to establish a retirement account. Typically, the sooner you set one up, the less money you need to put into your savings account to build its value over time. That’s due to the benefits of compounding interest. Work with a financial advisor or your employer to set up an account.

You may have many New Year’s resolutions this year. Don’t forget to put your financial resolutions at the forefront to start building wealth and overall financial well-being. It is a good step towards keeping your finances under control, so you may be able to invest, buy, and save money over time. Working with the right team of professionals at your bank or even with an advisor may help you.

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