In case you are looking forward to achieving something this New Year, the probability is that the plan is money-related (saving more and spending less). It may also involve settling some bills for the moments that you spent money that you did not have.
Recent findings show that the average household in the United States has nearly $7,000 worth of credit card debt. What this figure means is that such people will have to pay an interest of about $1,000 per year. If you are in this situation, all is not lost since you can still put your financial matters in order. Check out some great tips from Kimberly Palmer, who is NerdWallet’s personal finance specialist, to help you achieve your financial resolutions.
Obtain a Balance Transfer Card
In case you have credit card debt, think about getting a transfer. According to Palmer, interest rates are currently going up. Hence, the best thing you can do is obtaining a balance transfer card for 2019 before interest rates rise any further. With that, you can easily transfer debt from your previous credit card while enjoying a 0% introductory annual percentage rate (APR).
If you can service the least payment every month, especially in the course of the 12 to 15-month introductory duration, you can comfortably settle your credit card debts without being charged additional interest. Also, try sticking to a strict budget by using debit cards or cash. Doing so protects you from piling up more debt.
Get Rid of Banking Fees
According to Kimberly Palmer, most people are not aware that they pay monthly fees for banking services. The charges include costs for utilizing out-of-network automatic teller machines, overdraft fees and monthly maintenance fees. However, the kicker, in this case, is the minimum balance. Failure to maintain this balance causes the average individual to part with more than $12,000 in charges over his or her lifetime.
To avoid such banking fees, find a free savings or checking account (ensure that it has the FDIC insured label). It ought to be one that gives you a high yield of at least 2% or more. Therefore, if you have $10,000 in your free savings account, which is earning 2% interest rate, you will be getting an additional $200 each year.
Adhere to the 50, 30, 20 Rule
Saving money revolves around budgeting. To achieve this, Palmer suggests following a basic breakdown whereby 50% of your money goes to your basic needs including food and housing among other things, 30% goes to meeting your wants such as going out for a dinner date or going to the cinema, and lastly, the remaining 20% ought to be put aside for future planning including savings and debt payments.
You can try reducing your want expenses such as eating out or taking a taxi. Also, even though it is quite hard, avoid paying for subscription services such as Amazon Prime and Netflix among many others. Most of these can derail your financial plans. However, you do not want to touch money set aside for things like your retirement contribution or even emergency savings, which ought to be worth six months of living expenses.
Try Re-shopping your Auto Insurance
It seems little gecko could be right after all: fifteen minutes assist you in saving 15 percent. According to Palmer, it is quite surprising how only a few individuals shop around or go from one insurance company to another to get the best auto insurance deal. As such, most people end up paying more money for such insurance services than they actually should. This figure, on average, is more than $400 per year.
The surprising bit is that all that can be avoided by shopping around. All you have to do is spare some few minutes from your busy schedule to do some online search, key in your details, and see where you stand as far as getting yourself a lower rate on auto insurance is concerned. Yes, it is that simple. With that in mind, it is time to kick out such excessive bills this New Year and the years to come.
Set Some Money Aside
Bills or expenses are part of life since you need to take care of yourself, family and survive. However, planning for your future is equally vital. To achieve long-term saving success, you need to cultivate a saving habit. Palmer recommends that you try transferring money to your savings account automatically every month. For instance, you can do this after receiving each paycheck and at the end of the year, it can make holiday shopping much easier on your wallet.
Make this transfer either through your work’s direct deposit or your bank. Hence, if you save $40 for each bi-monthly paycheck cycle, you will have reached nearly $1,000 of savings at the close of the year. When you make saving an ingrained habit, meeting this year’s and future New Year’s financial resolutions will be undeniably easy.