The one thing the majority of us have is debt; and most of that majority have an inadequate savings account. While not all debt is bad debt, financial hardship can strike the best of us at any time. Whether you are just floating along as usual, have recently wiped out debts in Ohio bankruptcy, or are looking to just sharpen your money management skills, here are a few ways to better your finances for 2014:
1. Start a budget — people underestimate the value of a true monthly budget. Outlining your monthly expenses and income can prevent you from overspending or paying balanced late. Not only can a budget keep you on track for spending, it can highlight areas that you could reduce spending to put towards other finance goals like paying down a debt or saving.
2. Eliminate an expense — most of us could do a better job at cutting out that third trip to Starbucks or eating lunch at the office instead of a restaurant. Eliminating even one unnecessary expense per week can positively impact your bank balance. Use your budget tracking and history of spending to identify one small way to reduce your spending each month.
3. Make an extra payment — while all debt accounts come with a specified minimum payment, paying strictly the minimum will only keep you out of default and chip away at your debt balance. Making an extra payment on one or more of your debt accounts can help speed up the debt repayment process and save you thousands down the road in unnecessary interest charges.
4. Boost your savings — your savings account should be a priority in your financial profile. If you aren’t already, make a commitment to saving at least 2-5% of your monthly income each month. Many banks will offer automatic checking to savings transfers that you can set up to make the process as easy as possible. Watching your savings grow is well worth the few less dollars available for that cup of coffee each month; and it can be useful as an emergency fund in the future.