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At the beginning of every year, I hear and read about people making all kinds of resolutions. Some people decide to stop smoking. Almost everyone decides to hit the gym. Me? I typically try my hardest to go on some kind of diet – even though it’s usually over by mid-February.
Hey, at least I’m being honest.
What I don’t hear much about are resolutions that have to do with our finances. And honestly, that’s probably an area we could all use a little help with. Because part of this whole “adulting” thing means being responsible with our money, and the steps you take now to make sure your finances are in order will certainly help you in the years to come.
Don’t know where to start? Here are the basics:
Create A Budget
Creating a budget isn’t a sexy thing. I mean, I love money and I’m a bit of a money nerd, but setting boundaries on what I can and can’t spend isn’t something I’d consider fun. I’d much rather be able to wake up, go shopping, and not have a care in the world about how much I spent. But that’s not reality, people, and I’ve slowly come to terms with that. The truth is, the money habits you form now – especially in your twenties – are going to either positively or negatively impact your financial future. So sit down and make a budget for yourself. Believe me, your future self will thank you big time.
Create A Plan For Paying Off Debt
Oh God. Isn’t debt the worst? Think about it – who the heck wants to take half their paycheck and send that money to student loans or credit card companies? I know I don’t. Reality is, though, most people these days have insane amounts of debt, so if you’re one of them – don’t panic. Instead, make a plan to pay it off because newsflash * that money you owe doesn’t magically disappear. * You don’t just get to borrow a bunch of money and never pay it back. Those debts will definitely haunt you and if you’re not careful, they could affect your ability to do other adult stuff like buying a home. Sorry to be the bearer of bad news, my friends. Just trying to help you out.
So figure out how much you owe and the best way to pay it back. Do some research on both the Debt Avalanche and Debt Snowball methods and determine which one of those makesthe most sense for you and your situation. Regardless, your focus should be on getting rid of as much debt as possible in the shortest amount of time. Goodbyeeee Starbucks coffee runs! You’ll be missed dearly.
Check and Fix Your Credit
You can have the tightest budget ever and finally pay off all your debt, but if you’ve got bad credit, it can really hurt you. Now we all make mistakes, and some of those mistakes you might have made really early on in your adult life, so don’t worry. Lucky for you, there are companies like my friends at Lexington Law who specialize in credit repair. They’ll help you review your credit report because let’s be honest now…when was the last time you actually read your credit report? Do you even know what your credit score is? The pros at Lexington Law help you take control of your credit by reviewing your report with you and making sure that it’s accurate. They can even help you remove obsolete and unverifiable items from your report which ultimately helps improve your score.
But why should you care? Well, if you’re planning on buying a car or a house or making any kind of major purchase in the future – you know, adult stuff – then yea, you’ll need good credit. Because if your credit score is in the toilet, lenders aren’t going to lend you money since they’re not really confident you’ll pay them back. So put your adult pants on, and do what you need to do to fix your credit score. But don’t do it alone. Head on over to Lexington Law and reach out to them for a free consultation.
Also, check out this really awesome article to see how just a few small adjustments can help you improve your credit score. Really, it’s not that hard.
So that’s about it! That’s a good starting point. Do those three things and you’ll be well on your way to improving your finances this year. And then – you can celebrate!