A Few Tips on How to Budget in the New Year

Chances are, you’re still feeling the effects of this year’s holiday celebrations on your billing statements—unless you have extraordinary will power or managed to get rid of all your credit cards already, like a fiscally responsible adult.  Even if you don’t have a tremendous amount of credit card debt, you likely have some student loans debts you’re still repaying, or there’s a place you’d like to visit sometime in the next decade or so.  If so, you probably could stand to save a bit more money than is currently the case.  Here are a few strategies to help you pay off your debts, save some money, and generally gain more control over your finances.

Budgeting Apps

There are a number of budgeting apps available for your smartphone, out there—I’ll be recommending primarily apps for Android phones since I’m most familiar with them—with no shortage of articles with recommendations, but I would be remiss if I didn’t mention one app that seems to be on everyone’s list: Mint. It helps track and pay your bills, creates a budget based on your current spending habits, and even provides a credit score so you know how you’re doing.

The first budgeting app I’ll mention isn’t for budgeting, per se, but it will help you find the best shopping deals out there, if you’re willing to comparison-shop.  It’s called ShopSavvy, and it allows you to scan products in order to compare prices and find the best places to find those products.  That’s pretty savvy, don’t you think? A third app, MoneyWise, helps you control your budget, rather than spend it:  you can monitor cash flow and create budgets using graphs and filters, in order to get an overview of spending patterns.  It’s also possible to export your data to your computer in order to import the numbers to a spreadsheet, if you’d like.

Online Resources

If you’re more of a stay-at-home type who prefers to work primarily from your desktop computer, there are also a few online resources I recommend to help manage your money and get your credit score up to par as well.  First off, there’s myFICO, which allows you to access and monitor your credit score, if you’d like to work toward improving your score and paying off past debts.  You can also detect credit card fraud this way, in the event of an identity theft.  Second, there’s Money Management International, which provides a financial education section with resources such as advice for kids on proper money management techniques.  

Third, there’s LendUp, which offers a number of free financial literacy resources about topics such as credit building, credit rights, and credit report literacy.  They also provide short-term loans.  They also have a credit card you can apply for, even if you are trying to rebuild your credit or you’ve never had a credit card, in the past.  Finally, there’s a free online course from University of California at Irvine called the Fundamentals of Personal Financial Planning.  Designed with long-term planners in mind, this course covers how to correct credit problems as well as how to improve credit and plan for the future, as well.

Debt Repayment

If you’re still feeling the effects of the holiday spending rush, you’re not the only one.  Don’t despair, however: TurboTax has a few tips that may help ease the guilt of not-doing-anything and get you on the right proverbial track, again.  First, if you have credit cards or store-specific credit accounts, compare the interest rates of your various cards.  Concentrate on the cards with the highest interest rates, first—such as cards linked to individual stores or brands, which tend to have especially-high interest rates.  You might consider a balance transfer, which will temporarily relieve the high interest pressure.  Second, reach out to your credit card companies in order to negotiate your interest rates.  Although the thought of this might seem intimidating, you might be surprised by what card companies are willing to do, as they’d much rather lower a high interest rate than lose you as a customer.  

Third, consider embarking upon a credit-fast and putting away your credit cards altogether, for a while.  Credit cards should always be the last resort, rather than the first go-to, when considering new purchases.  If you can’t afford a purchase without putting it on one of your credit cards, it may not be wise to purchase that item at all.  Fourth, pay down a portion of your debts with your yearly tax refund.  It will feel good: trust me.  Fifth, reduce excess expenses and apply your new budget savings to your monthly bills.  

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I realize that budgeting is not as fun as spending money.  Of course it’s not.  However, it also feels great to ease the burden of crushing debt from your shoulders.  Eventually, the burden will lighten enough that you’ll be able to run, rather than walk, to the top of the next mountain you climb.  Plus, all that staying in might make you a better cook.  You may even lose weight as a result of avoiding all those excess restaurant calories.  

Best of luck, and share your own budgeting tips in the comments section, below!  

Image Source: 401(K) 2012