Planning for Financial Success in the New Year

By now, you’ve probably broken a New Year’s resolution, or two, or three. But there’s one resolution you can’t afford to break and that’s getting out of debt. You’re on the right path to success being on a debt relief plan, but this is no time to let your guard down. Toward that end, here are 9 tips to help you keep your commitment this year.

#1: Reassess your budget.

If you don’t have a budget, you’ll need to create one, but otherwise, examine last year’s expenses and income and adjust this year’s budget based on known changes. For example, have you paid off a student loan or found a part-time job? Are you having a baby? Is your sister getting married – five states away? Trim the fat in your budget to accommodate any new, known expenses. CareOne’s online Budget Calculator and budget planner, as well as smartphone applications (e.g., Mint) can help.

#2: Set realistic goals.

Once you’ve revised your budget, pick a realistic, short-term goal like saving $5 or $10 a week. Use the emotional boost of that victory to propel you toward your next goal. Also, goals are often easier to obtain when written down. Think about all those “to-do” lists you make at home or at work and how satisfying it is to scratch off each accomplished task. Then, simply keep setting, achieving and celebrating (in a small way!) these minor achievements.

#3: Build a support system.

If list-making doesn’t work, tell others about your financial goals. Vocalizing goals to significant others, best friends or co-workers holds us accountable to someone other than ourselves – perhaps someone who won’t let us fail and will cheer us on when we want to give up. Click here for tips on finding your own support system.

#4: Clear the clutter.

Create a system for handling incoming communications, including important bills. Whether you receive bills in the mail or electronically, plan where these important communications will go upon arrival, and schedule a time each week to handle them. For example, if you’re working in a paper world, grab two shoe boxes. Use one for storing incoming bills or other important mail. The second box can hold items that can wait for you to act on. Dividing your clutter helps you see more clearly what needs immediate action. Organize a yard sale to get rid of unneeded items and direct the profit to your debt relief plan. Or, donate usable items to charity.

#5: Look for new ways to save.

Costs are soaring at the grocery store, fuel pump, and at home, so identify ways to save. For example, download a smartphone application that helps you locate the cheapest gas prices in your area, save on energy costs, or manage food expenses by pairing clipped coupons with sale items to double your savings. Buying lunch or coffee at work? Brown-bag and brew a cup of java at home instead. Paying for an expensive gym membership? Exercise at home or outdoors for free.

#6: Earn more.

Consider a second job to pay off your bills faster or, if you’re performing at an exceptionally high level in your current job, ask for a raise or promotion. Alternatively, rely on your personal interests or skills to earn money. Try selling homemade crafts, tutoring, pet-/house-sitting, performing handyman duties for neighbors, etc.

#7: Get healthy.

Take care of your health, and your body won’t be the only benefactor; your wallet will benefit, too. For example, quit smoking, drink less alcohol, lose weight, and you’ll likely visit the doctor fewer times and require less medication. Improving your health may also lower your healthcare or life insurance premiums, keep you mentally fit, and stave off diseases that could be costly as you age.

#8: Expect the unexpected.

Even the best-constructed plans can break down. Be sure to have a backup plan, namely an emergency fund, to get you through a sudden illness, broken-down car or job layoff. Admittedly, it’s hard to save when you’re in debt, but setting aside even a small amount each week is a great way to get started. Aim to build an emergency fund that covers three to six months of expenses. Try directly depositing a portion of your paycheck to a savings account. And if you can’t determine whether to pay off debt or save when you have extra cash, call your debt counselor for advice.

#9: Stay informed.

Stay in touch with what’s going on in the debt relief industry, as well as new ways to save, stick to a budget, or get support. All of this is a click or phone call away when you engage in the CareOne community. Read the blogs on the site and take advantage of our debt help tools.

With these tips and the simple mathematics of spending less than you earn, you’ll be well on your way to achieving your personal finance resolutions this year! Good luck! 

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