The holidays have come to an end, and with the excess of food and spending, most people’s credit card statements aren’t looking very pretty. In true traditional form, the beginning of the year is the time for setting goals we’d like to achieve. While losing weight is the reigning king of New Year’s resolutions, getting out of debt or even better managing your finances is a close second.
It is never too early to make a plan for your personal finances throughout the year, especially if you are suffering from credit card debt. To help get you on the right foot in 2016, we have four resolutions you can follow to help you pay off your credit card debt.
Pay off high-interest debt first.
In the long run, higher interest debts are going to cost you more money. Even if your highest interest debt isn’t the largest amount owed, these credit cards should be the main priority of your repayment plan. You can discuss your credit card situation with a credit counselor if you are having trouble deciding which cards to pay off first or what your approach should be.
Spend less than you make.
Just as you can’t lose weight if you take in more calories than you’re burning, you cannot get out of debt if you continue to spend more money than you make. How can you increase savings, make investments or reduce debt if you are consistently overspending your income? Create a budget and stick to it. This budget should factor in all aspects that contribute to your spending. From work lunches to gas money to big purchases and credit card bills, even the smallest details should be included in your spending plan.
Use apps to help you balance your finances.
From email to pictures to social media, our phones rarely leave our hands. Why not transition your budgeting system to a digital platform and use a smartphone app to help you stay on track? Android and iPhone users alike have a plethora of options when it comes to personal finance apps. Mint is an app that give you a real-time glimpse into all of your finances, including credit cards and bank accounts. It will automatically track your spending, categorize it and alert you when you are reaching a specific budget limit. This app is among the most popular and widely used options available. Using an app like this can help you stay on top of your spending and credit card repayment plans.
Monitor and clean up your credit report.
When was the last time you checked your credit report? For most people, it has probably been a while. Credit reports can provide insight into your financial status, but they also aren’t fool proof. There could be inaccuracies that need to be fixed. In monitoring your credit report, you can see which steps are most appropriate in rebuilding your credit. This could be in paying down debt or even paying off accounts in collections. Monitoring your reports can also give you a glimpse into how your credit card habits are affecting your credit score.
With all of these tips, paying off your credit card debt will be one of your most successful New Year’s resolutions. If you want more help this year, contact one of our credit counselors to discuss the best ways to relieve your debt and create a financially sound year.