What have you learned from your Finances in 2013?
Are your finances in a healthy state from the decisions you have made in 2013? Are you planning to make choices in 2014 that will better your financial situation; perhaps make a plan to get out of debt?
The Bank of Montreal conducted a survey this past November on new year resolutions for Canadians in 2014 and they found that personal finance issues is the number 2 topic. Health and fitness scaled above for most. Out of the people surveyed 80 per cent planned to make a resolution at all.
BMO stated their survey found that 59 percent of respondents had a financial plan, and 82 per cent of them believe it helped them in 2013. Those who did have a financial plan (37 per cent) claimed the reason was lack of money.
Is focussing on personal finance issues a new resolution for you?
To help you build a successful plan, here are a few ideas to mull over.
Build a reasonable budget
Take an account of all of your sources of income and your debts including rent, mortgage and loans. After you have a picture of what is left over, prioritize your spending. If you don’t know how much you spend on everything purchases, use a spending journal. It may take a month to get an accurate account but if you record each purchase right down to the penny you’ll be in a better position to make decisions about how to save your money. If you know you spend $40 a month on coffees and find yourself a bit short on cash at the end of the month, you can cut your coffee fund in half. Be reasonable and “know thyself”. Enjoy a little frivolous spending power, if you can afford to, to keep you happy, but within reason.
Find more Sources of Income
Find an opportunity to earn more income whether it is from asking for a raise, earning overtime pay, finding a higher paying job or taking on some weekend work. If you can put more towards paying off your debt, you’ll be able to pay it off much faster than continuing making only minimum payments.
Find ways to Save
As a consumer you need to ensure you’re getting the best bang for your buck. Take a look at your phone and cable bills to see how much you can save with bundled service packages. Consider your hydro bills and make the effort to do your laundry in the evenings or on the weekends when the rate is lower. Don’t forget coupon cutting and seeking deals online are great ways to save a few bucks.
Pay more than the minimum payment
If you continue to only pay the minimum payment on your bills it will take you years upon years to pay off the full balance. For example, for a $10,000 debt with an interest rate of 19%, you will end up paying $10,834.16 in interest alone by only making the minimum payments. If you add this interest to your original balance, you’ll find yourself paying a total of $20,834.16! Not to mention that it will take you 258 months to pay this total. A clearly better strategy is to pay MORE than the minimum payment each month. If you cut your expenses or find some extra income, you’ll have the money to put towards your debt.
Here is to a financially prosperous 2014 for you!.
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