Has holiday spending left you feeling a little off-kilter over the state of your finances? This is certainly understandable. Even if you’ve stayed close to home and kept your gift budget in check, it’s easy to overindulge in areas like food and entertainment with friends and family in town, and more free time to enjoy their company. Hit the reset on your financial health, and start 2018 on course, with these tips:
Put a strategy in place for paying down credit cards: Last year, consumers took on an average of $1,003 worth of holiday debt, an uptick of 1.70 percent from the average holiday debt of $986 in 2015. While the increase in spending might be a taken as an indicator of overall confidence in the economy, the fact that many Americans are still paying off this debt which was incurred last holiday season is clearly not a healthy sign. Need an effective way to start whittling down your credit card debt? One solid approach is to focus on paying down the credit card with the highest interest rate first – paying only the minimum on your other credit card accounts. Once you’ve eliminated the debt on this card, take on your card with the next highest interest rate, and continue this process. Other excellent options to consider: consolidate your high-interest credit card debt to a fixed rate personal loan or transfer it to a credit card with a lower rate.
Take advantage of Personal Financial Management (PFM) tools: As you likely know, an important first step in improving your financial position is to take stock of your current situation, and set manageable goals around this. What you might not realize is just how easy this has become with free and secure online money management tools that allow you to combine all of your separate financial accounts together in one central place. Programs like SF Police Credit Union’s MoneyTrac make it simple to track and monitor spending while helping you to take the guesswork out of creating and maintaining a budget. These programs also enable you to streamline bill payments, help manage assets like investments and properties and obtain a real-time snapshot of your overall finances.
Set attainable goals for building your emergency fund: Financial experts recommend having cash set aside to cover at least three, if not six, months of expenses should you face a financial setback such as a job loss, medical crises or major repair to your home. But with living expenses as high as they are in the Bay Area, this can seem like an unrealistic standard for financial health. If creating a cash cushion of 3-6 months is too much of a stretch for you (and you’re certainly not alone here), try starting with a goal of saving up one month’s expenses. Not comfortable with this either? You could always start with a more doable amount (perhaps as low as $50-$75), and then increase this number incrementally as your realize your monthly goals. To make saving effortless, set up automatic transfers from a checking to a savings accounts.
Partner up with a friend: As with your physical fitness goals, one of the best ways to stay motivated in improving your financial outlook is to create goals and track your progress with someone you know. Not only will the accountability to someone else boost your resolve, but you’ll likely find it rewarding to provide and receive this kind of mutual support. Once you’ve shared your goals with your financial buddy, be sure to schedule regular meetings or check up times.
Clear out your clutter: Have you considered that unnecessary items in your home may be draining you of time, vitality and even money? By taking proactive steps to reduce clutter that has gradually accumulated over the years, you may suddenly find yourself more productive, and with a renewed sense of well-being. According to The Simple Dollar, reducing clutter in your home is directly connected to creating a more financially successful life. In addition, you may be able to earn extra cash by selling items you no longer want through services such as eBay, Craigslist, Thredup.com, etc. Just be sure that you take proper safety precautions, which you can find on our blog post titled “Safety Tips for Cashing in on Spring Cleaning.”
Looking for more relief from your holiday spending? A fixed-rate Personal Loan from SFPCU is a great tool to consolidate your high-interest debt and get back on the right financial track for 2018! Instead of making multiple payments to your various creditors each month and continuing to rack up high interest and fees, use your personal loan to pay off outstanding debt and begin making one fixed monthly payment. We offer loan amounts up to $25,000 for up to 72 months with competitive rates and flexible terms. For details and restrictions, visit http://bit.ly/SFPCUPersonalLoan.