Staying Ahead of the Curve Financially in the New Year

There’s no right or wrong time to rebalance your budget, but since the New Year is traditionally a time to make resolutions, it’s also an excellent time to resolve to get your finances back on track. Since we each have unique aspects to our financial situations, there is no one solution that will work for everyone, but let’s look at some fundamentals that anyone can apply to help you get ahead this year.

Evaluate Your Situation

One of the first steps you need to take is to make an honest assessment of where your money is going. One of the biggest downfalls for many of us comes, not necessarily in the big categories like transportation or housing, but in our incidental or discretionary spending like:

• Dining out
• Coffee
• Soda
• Lottery tickets
• Hobbies

You get the picture. If you’re not careful, you could easily squander a couple of hundred dollars each month, just by consistently spending a few extra dollars per day. Track your own spending for a month and see where your money is really going. There’s nothing on the list above that is necessary for survival, but eliminating any one of them may be the difference in allowing you to balance your budget.

Reducing Expenses

If you already have a budget – great! But when’s the last time you updated it? Having an outdated budget, or no budget at all, is setting yourself up for a financial disaster. You can use CareOne’s Budget Planner to help you estimate your larger expenses. It’s helpful to use a tool like this, so that you don’t overlook any categories. Here are some essential budget items that may change over time and need to be evaluated periodically:

• Utilities
• Transportation (gas, parking, bus, train)
• Housing (rent or mortgage)
• Food
• Insurance

Although the items listed above are necessities and you can’t completely eliminate them from your budget, there are things you can do to try to reduce the impact of any increases. Some may not be possible, but even making one of these changes may help you find extra cash in your budget. Links are also included to some helpful articles on these topics located in the Article Library on CareOne’s website.

• Utilities
  • Run major appliances at “off peak” rate times
  • Have your heating and air conditioning system tuned up
  • Add insulation and weather-stripping
  • Read more ideas in “Keeping Warm in the Winter – Without Spending a Bundle”
• Transportation
  • Carpool to work
  • Combine errands
  • Check with your employer about alternate work arrangements – for example, working 4 ten hour days or telecommuting
  • Read more ideas in “Dealing with Rising gas Price”
• Housing
  • Look into refinancing your mortgage
  • Consider renting out a room
  • Move to a less expensive home
  • Read more ideas in “Avoiding Mortgage Foreclosure”
• Food
  • Prepare all your meals at home
  • Shop with coupons
  • Search for recipes that help you stretch your grocery budget
  • Read more ideas in “Cut Your Food Bill”
• Insurance
  • Comparison shop at sites like www.esurance.com
  • See if you are eligible for group rates through your employer or any organizations you belong to like AARP, the military, or worker’s union.
  • See if there are discounts available for things like having a good driving record, or insuring your house and car through the same company
  • Read more articles and advice on different types of Insurance

Increasing Income

When facing a budget crisis, it’s natural to first look at how you can cut expenses, but don’t rule out increasing your income as the solution to balancing your budget. Here are some basic ideas for increasing your income.

• Get a Better Paying Job – The internet is a convenient and private way to investigate what other jobs are available in your area. Sites like Monster.com or CareerBuilder.com list thousands of jobs.
• Ask for a Raise – If you’ve been at your job for a while and gained some marketable skills, you may be entitled to a raise. Sites like Salary.com can give you an idea of what your skills might be worth to another employer and give you data to back up your case when talking to your employer
• Seek part time work – depending on your schedule and other commitments, maybe you could work extra hours in a retail store or restaurant
• Sell Unwanted items On-line – Many people supplement their income by combing their closets, basements, attics and garages for items they no longer use, but may be valuable to someone else. Check out Ebay.com or Craigslist.com
• Garage Sale – If you’re not internet savvy, take those same items you’ve collected and have a garage sale. You can even advertise for a few dollars in the local paper or Penny Saver
• Rent out a Room – Taking in a boarder can add a steady income stream of a few hundred dollars each month.
• Offer Lessons – If you have a talent, offer to teach it to other people for a fee -for example, music lessons, or art lessons
• Teach – Check with your local community college to see if they need an instructor for your particular skills. If you are an auto-mechanic, maybe they would like to offer a course on basic auto repair.
• For additional ideas, read “Earning Extra Money: Moonlighting and More."

Whether you decide to balance your budget by cutting costs or increasing your income, the important thing is to get started. Don’t feel you have to do it alone. If you want some support, check out the discussion boards on CareOne’s website. You’ll meet others who are facing similar challenges, and you just might find the solution that is going to help you stay ahead of the curve financially this year!