Whether you’re worried about your outgoings being too high, or have a particular goal in mind, focusing on your finances in the New Year can make your life much less stressful. If you haven’t yet made your New Year’s resolutions, then here are some financial changes you might want to make in 2020 which can ensure you end the year with a healthier bank balance.
1. Keep track of everything you spend
No matter what your lifestyle or how you spend your money, The Balance suggests that keeping track of what you spend will let you see where you’re wasting money and where you could potentially make savings. You can either do this with an old-fashioned pen and notebook, or use one of the many apps out there designed to help. This can help you make a budget and find ways of reaching your financial goals, without needing to get into debt.
2. Look at ways to pay off your debt
Even if your bank account is well balanced, paying off debt means you aren’t stuck paying interest and can secure a better credit score. It’s important that you understand how interest and APR works, so you can decide which debts to pay off first. You should aim to pay off the debts that will cost you the most in the long term, as early repayment can often save you thousands.
3. Improve your credit score
Any improvements to your credit score can make a big impact in the amount of interest you’re charged, and you’ll have access to a greater number of financial products. It is possible to get bad credit payday loans, which are often used by those who need to borrow small amounts of money in emergencies.
However, if you’re going to be applying for a mortgage or car loan soon, it’s worth improving your score now, so you have more choice of products.
4. Learn about investing
While savings and building a nest egg are important goals, if you want to try and make the most of your money, then you might want to learn to invest. Investing in the stock market can give you better returns than savings accounts, but the downside is that it’s risky, a little like gambling. Ultimately, you should never invest more than you can afford to lose, but if it’s done right, you can make good returns.
5. Talk to your partner about money
If you’re married or in a relationship, then it’s important to talk about money openly and honestly, even if you have separate bank accounts. Having conflicting ideas about money can cause friction, so it’s always best to discuss finances even if it’s tough. Every month, try to set aside some time to talk through your finances for the weeks ahead, so you know what big expenses are coming up. If you’re planning a big life event like a wedding, buying a home, or having a baby, then you need to consider how your finances will be affected and figure out how you’re going to work together to make big financial decisions.