Money Management Tips For 2017

The New Year is just days away and what better time to make changes to your finances. Take advantage of the wave of resolutions and add in better money management to the list. Here are a few simple money management tips for 2017:

Money Management Tips For 2017

Develop A Budget

If you don’t already have a budget, it is extremely important you develop one. There are many free budgeting tools online and through your bank that make it simple and easy to tracking your spending. Outline your essential living expenses like housing payments, utilities, groceries, gas, medical costs, clothing, child care costs, etc. Once you have a detailed list of all the expenses you need to survive each month, set a budget on spending for each category.

For fixed expenses like housing and child care, keep those set at their determined value. For variable expenses like groceries, clothing, and medical, set them at a moderate value. Don’t overestimate or underestimate how much you need in these categories, but pick a value that is down the middle, initially. You can adjust these up or down in a few months after you see a pattern emerging.

The  most important part of budgeting is sticking within your limit, which is easier said than done. A great way to stick to your budget limit is by setting alerts for each category. Most budgeting tools offer text or email alerts that will message you as you near your limit. If you receive an alert midway through the month you are nearing your budget limit, you can cut back on spending in those areas to make sure you don’t overspend. Further, you can better allocate any unused funds to boost your savings account each month. These tools are essential for making budgeting a breeze!

Pay Down Debt

We all want to reduce our debt burdens, but few people really take the right steps in doing so. Most Americans simply pay minimum payments each month or add a little extra, but this strategy is only going to drag out your debt battle longer. There are a few better ways to get rid of debt faster.

First, contact your creditor and ask for a reduction in your interest rate. If you have a good payment history and are in good standing, most creditors will grant your request. If you are  not able to secure a lower interest rate, shop around for other lenders who may be able to offer a lower rate and even an introductory zero interest period for you to transfer the balance to another card. This will allow you to pay more towards the principal in the next step.

Second, get to work. Consider the popular snowball method. Choose the debt account with the lowest balance. Continue to pay minimum payments on all other accounts except the one with the lowest balance, and funnel every extra penny into that monthly payment until the debt is paid off. Repeat the process with each debt account until they are all paid in full.