New Year, New Financial Outlook

One of the best things about the New Year is that feeling of having a fresh start.  Whether it is setting goals to get in shape, read more, volunteer, or even tidy up your budget, it can all start very soon.  After this crazy ride we have been on with the economy it is not surprising that most people want a fresh start.  What about the younger people?  Don’t think you are getting off that easy.

Like me, many of you probably did not lose much in the financial crisis of 2008, but you may not have gained much either.  So it is my challenge to you and even to me, to reevaluate our spending habits and clean them up!  Most likely you are in the category of spending tons and saving very little, which is most common among consumers.  Although your spending may not have entailed buying a new home, it may have been taking out loans for school, or even a new car. 

Your savings account is probably screaming for more money, but you feel the need to spend.  In 2009 make your New Year’s resolution to save more and spend less.  Now this might sound simple, but it is going to take some serious changes and time.  This means really thinking about your purchases and fighting the temptation to shell out tons of cash on something you don’t need.

Now if you have loans for school, then don’t fret.  This is what many would call the good kind of debt because it is enhancing your future.  I do warn you though, not to go out and spend your loan money on things other than school (that is only inhibiting your positive financial future).  Changing your spending habits is not an easy thing to do, so you really will have to put much thought into it, but the great thing is, it can be done!

If you are in college then trying to pay off your loans is probably a silly thing to do.  Yet, you can start saving.  If you save now, then it will be easier to pay off the loans once you are done with school.  Just words of advice, once you graduate DO NOT sit on your grace period; instead start paying off your loans immediately.  Otherwise interest rates are going to kick your rear, yes even the fabulous student loans you took out.  The longer you keep a balance on loans or even credit cards, the more money you are losing.

The easiest way to stay out of debt is to pay with cash.  Now I know some of you like the idea of rewards from credit cards, so if you want to go that route then don’t keep a balance on your card.  The best way to do this is to only purchase what you have money to pay for, otherwise do not spend that money (unless of course it is an emergency – which does not mean purchasing tickets to see your favorite band in concert). 

Another thing that will help you in the New Year, is to start an emergency fund.  Sure it is no fun to send your hard earned money into a fund that you may not see for years, but trust me, one day there will be an emergency and you will need that money!  Think about it, tires blow-out, cars breakdown, you get sick, and if you don’t have the money for it, it can really hurt your wallet.

So keep up your spirits and think positive about the New Year.  Today is a brand new day, so make the most of it by taking control of your financial situation.  If you have any questions about paying off debt or how to save, then shout back at us.  We are here for you.