Money tips to get 2016 off to a good start
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This week will usher out 2015 and bring in the New Year. To get your 2016 off to a good start, getting your finances back on track is a must. We’ve compiled a list of 10 tips to help you get money smart in the New Year. Check out the first five tips for better finances in part one of this two-part series.
#1 Pay with cash, not credit
If you tend to run up balances on your credit cards, you’re better off spending cash for your expenditures. Swipe your debit card instead of credit or pull out your budget money for the week and spend cash. When you see your cash dwindling, you’ll know you’re off track and can cut back. Credit spending is like taking out a loan for whatever you’re buying if you carry balances month to month. It’s also much harder to keep track of how much you’re doling out if it’s not coming out of your bank account or cash allotment for the week. Spend cash (or pay with debit) and you’ll spend less.
#2 Dig into your debt
Most American households have more than $8,000 in non-mortgage and non-auto loan debt. If you’re only paying minimum payments, this can result in years and years to deal with the debt and thousands of dollars of potential interest charges. Tackling your debt in the New Year can mean a better financial future. Start with the highest interest debt first to save the most money in the long run. Some debt is healthy - such as a mortgage for a reasonably priced house or auto you can afford. But credit card debt is not good debt. It comes at a great cost and can quickly spiral out of control.
#3 Quit smoking
A one pack a day habit costs $2,000 or more a year depending on your brand and the cost of smokes where you live. You’ll also pay more for life insurance and possibly health insurance if you’re a smoker that can add even more to your annual expenses. Cutting out a smoking habit can be life-changing for both your health and your finances. If you’re a smoker, this is the best move to make. If you have another expensive vice like drinking, consider cutting back – or, at least, set a goal to imbibe only at home. Having a cocktail at your house is far cheaper than drinking at a bar and will save lots of money.
#4 Establish an emergency fund
If you don’t have a liquid cash emergency fund, you need one ASAP. Set aside enough to get you through a major car repair, appliance failure, or other unexpected expense. This should be money you never touch except in an emergency and should be liquid enough to access quickly. Try and set it up somewhere you can get to quickly, but not somewhere you can access on a whim. A savings account at another bank than your usual is an idea – and don’t keep your ATM card on you. However you keep it, build one up, set the money aside and don’t spend it – it’s not a slush fund – it’s your safety net!
#5 Buy everything used
Almost everything you need can be bought used. Clothes, appliances, furniture, and so much more. Why buy new when the moment you use it, it will become used anyway? Used cars are also much cheaper. Don’t buy new unless you absolutely must. Even at stores, look for discounted returns, open box items and clearance for things you can’t get used. You’ll save thousands a year with this strategy. Once you make the adjustment, you’ll find that you never want to pay retail for anything again. You can get nice things without footing the cost of depreciation – whoever bought the item new covered that for you.
Consider bankruptcy for unmanageable debt
Finally, if you’re drowning in debt you can’t afford to service and are scrambling every month to make your money cover all your debts, you should know there is a better way. Chapter 7 bankruptcy wipes out unsecured debt completely – this includes credit cards, medical bills and some older tax debts. Chapter 13 bankruptcy allows you time to get caught up on past-due mortgage or car payments, can help you shed a second mortgage, and also discharges some of your unsecured balances.
Contact the Law Offices of John T. Orcutt to find out how you can be debt-free in 2016 using North Carolina bankruptcy. Call +1-919-646-2654 now for a free consultation at one of our locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington.