Eps 1628: Personal finance tips for the new year
— The too lazy to register an account podcast
| Host image: | StyleGAN neural net |
|---|---|
| Content creation: | GPT-3.5, |
Host
Elaine Freeman
Podcast Content
Commit to paying down debt now, and you can save money for future investments. By paying off your highest-interest debts first, not only do you reduce the amount that you are paying in interest, you also get to keep or spend the money somewhere else. For example, if you owe $10,000 on a credit card with an interest rate of 19 percent, that is $1,900 per year in just interest charges.
While this might seem counterproductive on the one hand, a balance transfer credit card could help you consolidate your debt, and it could also keep the interest from accruing for some time. Paying off the entire balance not only helps improve your credit score by lowering your utilization ratio -- how much credit you are using relative to how much you have available -- but also lowers interest charges or fees that can come with carrying debt month-to-month. Payment history is the single most important factor of your credit score, making it crucial that you pay off your balances on time and in full each month.
Once you know your credit score and where you stand, the best way to improve your score for 2023 is to ensure that you are paying all your bills on time every month. If you owe money on credit cards, determine what you can realistically afford to pay off over the course of the year.
If you are able to establish a budget and stick to it, you should not have to resort to credit cards or payday loans to help get through the rest of the month. You should start by setting up a debt payoff plan, and then commit to sticking with the payment plan throughout the year. You can pay your existing debt off using a personal loan, and with a personal loan, you have a fixed timeline to repay the debt completely, so it does not just get delayed forever.
Then, at the end of the year, depending on the limits on how much you can pay off in a lump sum on your mortgage, you could roll over all that money, or maybe you would like to take some of that money and stick it into a retirement fund before the end of the tax year.
If you have an option to save for your retirement via a 401, 403 or 457 plan sponsored by an employer, think about setting up your budget so you are contributing a certain amount every month to your retirement savings. If you already have a savings account set aside for emergencies, you may want to consider setting up an investment account for investing toward goals with a defined time horizon, such as a premature retirement or home purchase.
Take a few minutes right now to establish some new savings goals for the New Year, including how much you want to contribute to a retirement nest egg, a childs education fund, or the down payment for a house. Other major financial New Years resolutions include saving for big purchases such as vacations or new TVs or phones , cutting back on spending , and investing more . With a new year comes goals and resolutions, and 66% of Americans are planning on making a financial New Years resolution for 2023, according to a survey by The Ascent, a service of The Ascent, a Motley Fool.
Nearly half of Americans are looking to save more money in 2020, while another third are looking to improve their credit scores, and plan on creating a personal budget , according to a survey by Experian about top financial resolutions for 2020. Of Americans who have New Years resolutions for 2023 related to finances, 53% plan on paying down debt over the next year, making this the most common financial resolution.
Considering the fact that the most popular 2023 New Years resolutions that involve money will require time, commitment, and habit-building, it is positive that 73% of those making a New Years resolution related to money plan to use tools to help.
Paying off debt, contributing to a retirement plan, and creating a budget that you can stick with could help you to start off the new year with better financial health. With the right plans, you can keep your financial resolutions on track and finish the year ahead better off than when you started. To get started, here are 11 financial resolutions to make, with experts tips for sticking to them.
We have compiled a list of three realistic ways that you can begin getting your personal finances in order for 2023, as well as some of our favorite financial tools to help you on the road. It is important to review your finances on a regular basis, but there is no better time than with a new year.
Evaluating your finances can be stressful, but having that knowledge will enable you to set realistic goals for the new year. Setting financial goals is critical, but before setting any goals, you must understand where you are at right now. List Your Financial Goals Once you have taken stock of your financial mistakes and successes in the past, create a list of financial goals you want this year.
Doing this can help you stay on track with how well you are doing toward your financial goals, and fix any mistakes that you are making before they build up to crushing debt. As we near the end of 2021, start thinking about what you can do to build your finances stronger, because we never know when another financially difficult year is going to come along.