Earlier this week, in the post Money Makeover for the New Year - Part 1, I talked about the first four steps toward making positive changes to help you achieve financial fitness in the New Year:
Step 1: Set Your Financial Goals
Step 2: Live Within Your Means
Step 3: Stop Using Your Credit Cards
Step 4: Keep and Eye on Your Credit Report
Today I will finish up this two part series with the final 4 steps of your Money Makeover:
Money Makeover for the New Year - Part 2
Step 5: Creat an Emergency Fund
When life throws an unexpected event at you, and we all know this will happey, having an emergency fund can make all the difference. Make a committment to save 5% of your income for the first 3 months. Then bump that up to 10% for the next 3 months. By the end of the year, saving will become a habit and you will have begun to build a sizable emergency fund.
To help make this savings plan automatic and "pain-free", set up and automatic transfer of funds from your checking to your savings account after each pay day. Breaking up your savings over them month will seem easier than coming up with the whole ammount at once.
Step 6: Always Pay More than the Minimum Payment
I can't stress this enough, so I will repeat it...ALWAYS PAY MORE THAN THE MINIMUM PAYMENT! Even if you can only add $5 or round your payment up to the nearest even number. Every extra dollar you pay will help you eliminate your debt faster and save you thousands on interest over the life of your debt.
Step 7: Contribute to Your Employers Retirement Plan
Most employers will match your contribution into the companies retirement plan such as a 401K. Not only are your preparing for your future, you are getting FREE MONEY from your employer! If you are self-employed or if your employer does not offer a retirement plan, you can invest in an Individual IRA, Roth IRA, and/or plan for self-employed persons.
Step 8: Don't Hesitate to Ask for Help if You Need It!
After you have taken a close look at your budget and your overall financial situation, you may feel like eliminating your debt is never going to happen. This couldn't be further from the truth. You have several great debt relief options available to you.
If you have made financial New Year's resolutions in years past without success, don't give up! Try again using these 8 steps to a Money Makeover to build new habits and provide a better financial future for you and your family.
