How to Have a Better Financial Year in 2019
The new year is upon us. This is the time of year when many people take the opportunity to set some New Year’s Resolutions and goals for the future. Even if you’re not the kind of person to set a formal resolution, the new year is a still a good time to review your current situation and set some goals for the future. There’s no better area of your life to do this in than to look for ways to improve your finances.
Almost everyone wishes they had more money and, while you likely can’t guarantee that you’ll earn more in 2019, you can take several steps to put yourself in a more favourable financial position. Here are some ways to improve your finances in 2019.
Improving your finances doesn’t necessarily mean you’ll need to do a complete overhaul of your financial situation. There are a lot of small things you can do to save more money or to use your money more effectively, such as:
- Calling your credit card company and asking if they can reduce or waive any fees you’re paying or lower the interest rate you’re paying.
- Cooking at home more often, instead of eating out or ordering takeout.
- Considering your monthly subscriptions (such as streaming services or gym memberships) and potentially cancelling some, even temporarily.
- Shopping around for new insurance. You could save yourself a good amount of money by switching to a different insurance company for car or home insurance.
- Having a garage sale or selling some items you don’t use online.
All of these tips result in relatively small savings, but these small amounts of money add up over time. A good reason to start small is that you don’t need to make a huge lifestyle change or drastically alter how you live to save some money.
Review your Spending
Do you track your daily spending? If you don’t, now is a good time to start. If you’re not sure where your money is going, it’s incredibly difficult to stick to a budget or to reduce your spending. Use an app on your phone, a spreadsheet on your computer, or a pen and paper to track what you spend shortly after you spend it.
Once you’ve been tracking your spending for a while, review what you’ve tracked. There’s a good chance you’re spending a lot more on certain things than you expected. Make some cuts here and there and you’ll have a bit more money every month.
Saving is difficult. One of the best ways to do it is to automate the process. See if your bank is able to move a certain amount of money into a separate savings account each month. Since the process is automated, you’ll find yourself saving money each month without even trying.
You will probably want to look into automating your bill payments as well, so you won’t ever find yourself paying penalties and unexpected interest charges again.
Save for Emergencies
One of the main reasons that people end up in financial trouble is that an unexpected situation occurs and they’re hit with a sudden expense they didn’t plan for. If you don’t have any emergency savings, you can quickly get into debt trouble if your car breaks down, you lose your job, or you become ill. In 2019, focus on putting some money from every paycheque into an emergency fund. Most financial experts recommend having at least three months of expenses saved for emergencies, but it’s okay to start slow.
Look at your budget and see where you can make some cuts, then put a bit of money aside each month until you’ve built up a good emergency fund. You may wish to follow the tip above and automate this process. Put your emergency savings in a separate account that is different from your main chequing and savings accounts so that you aren’t tempted to dip into it during non-emergency situations.
Know your Credit Score
Your credit score is important. It can determine whether or not a lender is willing to give you a loan and, if they are, what sort of interest rate you will pay. However, despite how important it is, many people don’t know what’s in their credit report.
The good news is that you can get a copy of your credit report for free by contacting the major credit bureaus. Your credit score is included in your credit report (only if you elect to pay extra). .
Once you have a copy of your credit report, check it for errors. These happen more often than you might expect and they can be very costly.