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Approach the new year with financial goals

Approach the new year with financial goals

Set goals, stick to a plan to have a successful year with your finances according to Principal Financial

@TheSunGazette

FRESNO – New Year resolutions are all the same. They deal with losing weight, eating better, quitting smoking, but so few are about managing money better. And there may be no better time to grab hold of your finances than at the beginning of a new year.

According to Principal Financial, 80 percent of Americans are making money-related resolutions that can end up changing their lives for the better.

Save more each month (40 percent), pay off credit card debt (32 percent), reduce spending (31 percent), save more for retirement (27 percent) and building an emergency fund (21 percent), round out the top five financial New Year’s resolutions for 2018.

When it comes to generations, 18 percent of millennial employees – higher than any other generation – are intending to pay off their student loan debt as a New Year’s resolution.

Of the top financial blunders of 2017, not saving enough (17 percent), accumulated credit card debt (11 percent) and taking on more debt (10 percent) rounded out the top three.

Better Business Bureau Serving Central California and Inland Empire Counties (BBB) offer up the following tips to help you improve your finances in the New Year.

Calculate your income
You can’t properly set a financial resolution unless you know what you’re working with. Calculate your monthly net income, which is after taxes, so you can set a clear budget with exactly what you are bringing home.

Set a budget
According to Principal Financial, dining out (26 percent), food and groceries (21 percent) and travel (20 percent) were the top areas where budgets were blown in 2017.

Millennials (28 percent) are more likely than Gen X (16 percent) and Baby Boomers (6 percent) to have blown their budget on clothing/apparel/shoes in 2017. Setting a budget and actually sticking to it is of the upmost importance if you want to have a secure financial future.

You can grab a pen and paper and track your expenses and set a budget the old fashioned way, use an interactive worksheet, or download an app that tells you where your money is going each month. If you choose to download an app, be sure to verify that it is the authentic app, and not a counterfeit one, especially if they ask for personal information like your bank accounts.

Pay down high interest debt
It’s best to pay off your accounts with the highest interest rate first, that way you’re not throwing away extra money every month in interest. Also, call your credit card company and ask if they will lower your interest rate. Some lenders will agree just to keep you from transferring your debt to another lender with better terms. If you shave even a few percentage points off of your rate, it can save you thousands and help pay down your balances faster.

Don’t spend recklessly
One of the best ways to save money is to not spend it on unnecessary things that you don’t need. One thing a lot of people do is try to keep up with the Joneses. They see their friends shelling out money on high priced items, and they want to do the same to keep up. This will only put you in debt later on, and that debt could end up being serious.

Pay your bills
You can’t get out of debt if you’re continuously late making your bill payments. Late payments come with a late fee, and depending on what the bill is for, that late payment could be more than the minimum payment. If you are the forgetful type, then try automatic bill pay. Automatic bill pay will ensure that the payment was sent in on time, which means no extra late payment.

Save for emergencies
Emergencies like job loss, home and car repair and medical costs can blow your budget completely out the window. Experts recommend that you save for roughly 3-6 months of living expenses in the case of an emergency. Also, it’s best to plan out any trips or big purchases ahead of time so you can save properly, and to only spend what you saved for, not extra expenses.

Contribute to your retirement
Make sure you are contributing enough to your 401k plan to get the full matching contribution from your employer. If you get a raise at your job, try and put that extra money aside into your retirement account. You were able to survive on that income for this long, so you won’t miss that extra cash and your retirement account will greatly benefit.

Keep track of your credit score
Credit scores are used by lenders to make decisions about whether or not to offer you credit, and what those terms (interest or down payment) will be. Your credit score is a decision-making tool that lenders use to help them anticipate how likely you are to repay your loan on time. According to Experian, a good FICO score will be above 670, while 800+ is considered exceptional. Your VantageScore (developed by Experian, Equifax and TransUnion) considers 700+ to be good, and 750 to be excellent.

Certain items on your credit report can have a greater negative impact on your credit score than others. Missed payments, charge-offs, collections, settled accounts, repossession, voluntary surrender, foreclosure and bankruptcy can all impact your credit score negatively. Even if you make your payments on time, closing accounts, opening new credit accounts and only having credit cards as a line of credit can also negatively impact your credit score.

For more than 100 years, Better Business Bureau has been helping people find businesses, brands and charities they can trust. In 2016, people turned to BBB more than 167 million times for BBB Business Profiles on more than 5.2 million businesses and Charity Reports on 11,000 charities, all available for free at bbb.org. There are local, independent BBBs across the United States, Canada and Mexico, including BBB Serving Central California and Inland Empire Counties which was founded in 1950 and serves Fresno, Inyo, Kern, Kings, Madera, Mariposa, Merced, Mono, Tulare, Riverside and San Bernardino Counties.

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