2014 is Almost Here: Three New Year’s Resolutions to Make to Improve Your Personal Debt
With 2014 just around the corner, many people are starting to think of their New Year’s Resolutions. Often these resolutions help us with goal setting and planning for the coming year, and often involve bettering a relationship, our own health, career, or financial standing. When it comes to finances, many begin making New Year’s Resolutions that will help them with their spending habits, and many are on the lookout for debt relief. Here are three resolutions you can make right now that will result in a better personal debt situation in 2014.
Make More than your Minimum Payments
The first step when looking at your personal debt is to look at your credit cards. Since credit cards, historically, carry the highest interest rates and make up for the third largest consumer debt in the United States, credit card debt should not be taken lightly. Credit card debt is not like mortgage debt, where a mortgage reflects an asset: a home. Credit card debt is just that: debt!
You can make simple New Year’s Resolutions toward lowering your credit card debt over time, perhaps over the course of 2014. Following the minimum, required payment on your credit card statements is not the best or fastest way to decrease your credit card debt. If you are used to paying only this amount, you are likely aware that making this payment barely affects your balance. The key to paying down credit card debt is to pay more than the required monthly payments, ultimately paying the entire balance if possible.
Making Changes to your Spending Habits
Debt, especially credit card debt, is reflective of our spending habits. Many people in today’s society feel that they can afford a particular item (or vacation) because they simply have room on their credit cards. In reality, this often causes people to become overextended, bringing their credit cards up to the maximum limit. Making higher than the minimum required payments on your credit card is a good start for the New Year, but you should also begin to monitor your spending habits. Write up a monthly budget comparing your income with your expenses, set aside a little money every month towards your savings, and then decide how much money you can afford to have fun with.
If you have difficulty saving money, you can speak with your bank about the saving options they offer, which may include automatic transfers into your savings account. That way, you don’t even know the money is missing, and before you know it you’ll have a stack of savings!
Making Changes with Debt Consolidation
Debt consolidation is an option many individuals, with varying degrees of personal debt, have utilized in order to pay down their debt quicker and free up their resources. When a debt is consolidated, the consumer takes out a new loan with a lower interest rate in order to pay off varying other loans with higher interest rates, such as credit card and student loan debt. Debt consolidation can be an effective way to pay down credit card debt and save money in the long-term, as long as you can correct any poor spending habits.
Each New Year brings positive resolutions that can have a great outcome on the future for those who are disciplined enough to follow through. If you’re looking to get debt-free in 2014, these New Year’s resolutions can put you on the path to financial independence.
Interested in learning more about our top ranked debt relief companies?