How to make your New Year’s financial resolutions stick
Credit to Author: Canadian Immigrant| Date: Mon, 26 Feb 2024 17:40:35 +0000
How are you doing with your financial goals for 2024? It can be tough to stay the course; if you feel that you are slipping or you need to refocus, use these five financial tips provided by Better Business Bureau to get back on track.
1. Improve your credit score. Most lenders will not give out loans to people with bad credit or if you are lucky enough to find one that will, your interest rate will be quite high. If you have a credit of less than 660, you should really try to raise it, according to Equifax Canada. Work up your score by paying your bills on time and in full, limiting how many new accounts you open, and utilizing a smaller percentage of your overall credit limit. 2. Create a personal budget. Tracking your spending month to month is a strong way to identify where you can cut back. Write down all fixed expenses, like mortgage, rent, car payments, cell phone bills, etc., and see how much money is left for discretionary expenses, such as clothing, eating out, and entertainment costs. Many bank phone apps give you the chance to review your total spending by category each month, which is helpful when setting up a new budget. Many experts recommend using the 50/30/20 rule – 50% of your income for your needs, 30% for wants, and 20% to pay down debt or save. Try out the budget planner built by the Financial Consumer Agency of Canada to start the year on a financially strong foot. 3. Build an emergency fund. Unexpected challenges are always around the corner, but it’s best to be financially prepared when they do arrive at your door. The general rule of thumb is saving the equivalent of three to six months of your regular expenses. By planning out your monthly expenses, you can figure out how much money you should be putting aside each month. Whether it’s $50, $20, or even $5 a week, the important thing is to stay consistent and start now. 4. Determine and assess any debt you owe. Do you have student loans or unpaid credit card balances? Knowing who you owe, how much you owe, and how much you can afford to pay is a great place to start. If needed, book a meeting or call with a bank advisor or your lender to assess your options. Also consider choosing a debt payment methodology such as the avalanche method, the snowball method, or a debt consolidation loan, should you need one. With a debt avalanche, you tackle the debt with the highest interest rate first. With the snowball method, you simply pay off your smallest debt first. Both situations will create momentum to pay off your next debt.5. Create a will. Having a will isn’t just for seniors. If you don’t have one when you die, provincial laws can determine who takes ownership of your assets and the costs to administer your property will increase. Wills are strongly recommended for those who have children, a spouse, or valuable assets, such as a company or stocks. Although you can write your will yourself, it’s a best practice to get help from a lawyer to ensure your will is legally binding. For more advice and tips to get your new year’s resolutions back on track, visit BBB.org/all/new-year-s-guide.
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