8 Money Resolutions For The New Year

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8 Money Resolutions For The New Year by James H. Dimmitt

Looking for a way to get a fresh financial start? Want to improve your overall financial health? Try these 8 resolutions designed to help you gain control of your income and expenses. At year's end, you'll be surprised at how much you've reduced your debt and the money you've saved!

1) Create and use a budget.

A budget helps you see exactly where your money is going from week to week and month to month. Creating and using a budget, no matter what your income level, will help you track and reach your financial goals more easily than without one.

2) Use your budget to help reduce credit card debt.

Let's say you are able to save $20 a month by budgeting your money. You could take that $20 and place it in a savings account where you would earn minimal interest. Or you could use that same $20 and add it to your budgeted credit card payment reducing your credit debt in two ways. You'll be reducing the amount you owe your creditor and you'll also reduce the finance charge on next month's bill.

3) Always pay more than the minimum due on credit card bills.

If you just pay the minimum due on credit card bills, you'll barely cover the interest you owe. It will take you years to pay off your balance and you'll end up spending thousands of dollars more than the original amount you charged.

4) Make payments on time to avoid late fees.

Making late payments adds to your debt load and may increase the annual percentage rate (APR) your creditors charge you. Additionally, late payments are reported to the credit reporting agencies and negatively affect your credit rating. This in turn could raise the APR on other credit accounts which have a "universal default" clause.

5) Never use a credit card at an ATM or a bank for a cash advance.

Cash advances on credit cards are assessed special fees and higher interest rates than what you pay for purchases made with your credit card. Creditors apply the majority of your monthly payment to your purchase debt rather than cash advance debt which increases the overall amount of interest you'll pay to your creditor.

6) Spend your money sensibly.

Using your budget, you may find that you're spending a good chunk of your income on discretionary items: morning coffee and donut, a weekly magazine, fast food lunches, etc. Each purchase seems like a small amount of money at the time, maybe $3-5. But these small purchases add up quickly and can amount to hundreds of dollars per year. Ask yourself if you really need these items and reduce your amount of discretionary spending. Use what you save to pay down credit card debt.

7) Live within your means.

Are you an impulse buyer? Do you use your credit cards to supplement your income? Do you feel the need to have the latest fashions, cars, stereos, etc.? If you answered yes to any of these questions, chances are good that you are overspending. And overspending means more debt - debt that will keep you from achieving your financial goals.

8) Check your credit report regularly.

Anyone in the U.S. can check their credit report annually by visiting www.annualcreditreport.com and check their credit with all three national credit reporting agencies. Checking your credit will help fight against errors and identity theft.

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© www.yourfreecreditreportnow.com James is editor of "TO YOUR CREDIT", a free weekly newsletter with tips to help you manage your personal finances. Subscribe today and receive his ebook "IDENTITY THEFT- How To Avoid Becoming the Next Victim!" and other free bonuses by visiting www.yourfreecreditreportnow.com