Your January Financial Housekeeping

Many people start the New Year with goals about losing weight or getting in shape. For most of these folks, the resolution energy burns out by Valentine's Day. If your finances are not where you would like them to be, why not choose one financial issue each month, paired with one effective tool, to get on top of your money worries?

Make a Revolutionary Resolution

Resolve to put $100 in savings in January. To do this, make choices from the tips below:

  • inventory your pantry and cook one meal each week from what you have in stock

  • cook and eat a vegetarian meal twice a week

  • cook at home on the weekend instead of going to a restaurant or getting food delivered

  • clean your closets and sell items you no longer wear instead of shopping for clothes

  • brown-bag your lunch to work at least 3 days a week

  • only stop for a specialty coffee on Friday

Each of these tips will require only a small adjustment in your behavior but can leave money in your bank account by February 1st. Keep the ideas you like to keep saving more money.

Review the Fees You Pay

Choose a block of time on the weekend and make a date with yourself. Fix a cup of hot cocoa or your favorite lunch treat (grilled cheese and tomato soup, anyone?) and tackle the pile of statements in your desk or on your computer.  These include 

  • bank statements

  • credit card statements

  • retirement account statements

You're looking for fees. They may be transaction fees, late fees or overdraft fees. If you're paying a small fee on your debit card each month because your balance is under $500, bump up your balance with the tips listed above and ignore that money. Treat it like emergency savings. If you're not facing hunger or eviction, you can't touch that money.

Choose Your First Target

Since you just went through your statements, you probably know which debt eats at you the most. Now that you know that you can save $100, you also know that you are a person who can manage their money, so why not tackle the worst debt?

Create a spreadsheet that you can use to list your debts by

  • minimum payment

  • total balance

  • interest rate

Sort this list by total balance, from smallest to largest. Keep saving until you have enough to cover your rent in savings, then dump everything extra on your smallest credit card debt. Here's why.

Roll Up Your Debts

Once you pay off the smallest credit card, you're going to leave the account open without using the card. Keep an eye on your mailbox. You will probably see offers for new credit cards and for 0% APR balance transfer cards.

Go back to your list and sort it by interest rate, from highest to lowest. If you're ready, you can roll that high interest debt onto 0% APR cards and waste less money on interest. If you're not confident about getting new cards, pay off the next smallest debt. Both systems work!

Rely on Old Fashioned Tools

Getting your financial house in order isn't all about going high tech. Yes, being able to build a spreadsheet is helpful. So is 

  • learning to cook

  • knowing how to hem your own pants or sew on a new button

  • growing your own fresh herbs or greens

None of these activities take a lot of space, but they do take time. If you find that you're always looking for fun outside your own door, find ways to have fun at home. Learn skills that will add to your quality of life without draining your bank account.

You Can Do This!

You can fix your financial challenges. You can even enjoy a more self-reliant, peaceful life. To learn more about getting your financial house in order, reach out to the National Financial Credit Group for tips on understanding where all your money goes.

BJC