How to Hack Your Way to Good Finances in the New YearBy Caitlin in Money
2014 was a rough financial year for a lot of people, the cost of living rose while the availability of new jobs seemed to plummet. If your 2014 was anything like it was for the majority of the population then it probably didn’t unfold quite like you had planned. Maybe you missed out on a job opportunity or a promotion. Maybe you spent more of your savings then you had planned. Or maybe your debts became too much to handle. Whatever your financial heartache was last year doesn’t have to follow you into the new year. 2015 is your opportunity to start fresh and turn your financial issues into financial successes.
Here are 5 financial hacks to help you make 2015 the year you finally conquered your personal finances.
Checkup on all Your Loans, Student or Otherwise
Most people have at least one if not more, so if you fall into this category then 2015 should be the year you perform a checkup and make sure you’re getting the most out of your money. Fresh eyes will allow you to make sure you have the best possible terms and interest rates and that you’re not wasting money. Consider consolidating or refinancing where possible. Refinancing a loan could potentially save you thousands of dollars in interest over the whole life of your loan and a significant amount each month. Lower monthly payments mean that you’ll be able to invest your money in things that matter to you, whether that’s travel or saving up for a big purchase or investment. You should also consider making slight changes to the terms of your loan, if possible. This could mean accelerating your payments or spreading them out a bit more. Checking up on your loans is small step you can take to make sure your financial life is in order and not working against you.
Create a Plan for Your Financial Future
If you’re going to try to make 2015 your most successful financial year then you’re going to need a detailed plan, without a plan you’ll probably have more difficulty than necessary. A plan will help guide you in the right direction and make sure you know what the end goal is so you won’t get lost along the way.
Your financial plan can be whatever you want it to be, a list, a budget or a schedule. Everyone’s personal finance goals and plans are just that, personal. There isn’t any right way or wrong way to plan your financial future. But the one thing you must do is actually take the time and sit down and plan it, write it down and set some goals. Seek advice from someone you trust or a professional if you’re having financial difficulties and don’t know where to start. However you decide to plan your financial future make sure you do what’s best for your own unique situation.
Start an Emergency Fund
2015 needs to be the year you finally start that emergency fund that everyone suggests you start. Your goal should be to be have enough saved away to cover a couple months’ worth of expenses. If you’re really up to the challenge then aim for six months, having that amount of money set aside will be a life saver if you ever end up needing it. Having this fund will also make it less likely that you’ll turn to credit cards to cover emergency costs. Let’s hope you never have to actually use your emergency fund but it will always be there to give you peace of mind, just in case.
Look out for Money Making Opportunities
Saving money is important and so is being frugal and living within your means, but spending too much of your time trying to be frugal could mean that you’re missing out on money making opportunities. Looking for a second job to earn some extra cash on the weekends or picking up some extra hours at your current job are much better ways of spending your free time than clipping coupons. Sure everyone likes to have the weekends off but if you’re really serious about your finances then you definitely need to consider other money making opportunities. A few extra hours on the weekend could be the difference between being debt free by the end of this year or in two years.
Become the Master of Your Credit
One of the most common personal finance mistakes that people make all the time is not paying enough attention to their credit scores. A good credit score is like a great personal reference in the financial world, having one will make getting loans and new credit much easier. Ignoring your credit history could potentially cost of a lot of money, a good credit score will allow you to get loans with better rates which will in the long run save you money. Building good credit should always be a priority so if it wasn’t in 2014, then you definitely need to make it one in 2015.
Before you can become the master of your own credit, you need to know what you’re working with. Request a copy of your credit report and find out what your credit score is, this will give you a better idea about what needs to be improved. Now that you have a better idea about what your credit history looks like you should educate yourself on how credit scores are calculated. If you’re young or are just starting to build a credit score in Canada then credit cards will probably be your main source of credit. You should always try to keep your credit card balances to 10% or less of your total limit and of course aim to make payments on time every single month. There are lots of other steps you can take to help build your credit score. Consider applying for a secured credit card or ask a family member who already has good credit to co-sign a credit card with you. The most important thing you can do is to do your research and make improving your credit score a priority in 2015.
Follow these personal finance hacks and you should be on your way to making 2015 your best year yet.