Many people resolve to get their finances in order for the new year. This resolution to manage debt, however, seldom gets very far.
Without breaking the task down into bite-sized bits to be tackled month after month, you are sure to be making the same exact resolution next year.
If you want to manage debt next year, here are some tips you can use.
January: Start a spending journal.
Write down everything you spend for the month of January. This will make you more aware of what you spend. It will also help you see how much of your money is wasted on trivial things.
February: Write and follow a monthly budget.
Based on the spending journal you kept, write a plan that included your regular expenses, your monthly debts, and your needs. Leave yourself a small allowance for miscellaneous things so you won’t feel deprived.
March: Start a filing system.
Purchase a file cabinet and file all of your bills both paid and unpaid for the last two months. Use this filing system to keep your bills organized for the entire year.
April: Get Your Taxes done on time.
Now that you are organized, spend the month of April getting your taxes done on time. Whether you are due a refund, which will help with your bills, or if you owe money, it is wisest to face it and make a plan for how you will pay the money or how you will spend it.
May: Create a debt payment plan.
Take a look at all of your credit cards and loans, and get a full idea of what you owe. Make a list of these bills in order of highest interest rate to lowest and plan to pay off these bills in that order. Pay the minimum of all the other bills and then pay as much as you can on the bill with the highest interest rate. When that is paid off, move to the next bill and begin to pay it off. Finally, get an emergency loan from ElcLoans or a similar website to catch up with your bills.
June: Contact your creditors.
Let your creditors know your plans for repaying them, especially if you are behind on any bills. If possible ask them for help in getting your bills up to date by reorganizing or re-aging the loans.
July: Cut back on your monthly expenses.
Look at your utilities and see if you can save money by bundling, unbundling, or changing companies. Cancel your unused gym and other memberships, and your magazine subscriptions. Decrease your cable and internet subscriptions as much as possible.
August: Treat yourself.
Take a short vacation or stay-cation. Don’t go crazy, but spend a little extra on yourself this month as a reward for your hard work. Do not, however, spend what you don’t have.
September: Make extra income.
Look into part-time jobs, stay at home opportunities, self-employment options. You can tutor, sell items on eBay, or get a part-time job in a retail establishment. Use this extra money to accelerate your debt payment plan.
October: Become Frugal.
Purchase energy-saving light bulbs, rechargeable batteries, and use less cleaning products. Learn to cut coupons or begin shopping in less expensive stores such as ALDI’s and warehouse clubs. You will also want to read a book or two on frugality.
November: Start shopping for Christmas early.
Avoid the December rush to purchase gifts so you don’t incur new debts to start paying off at the first of the year. Firstly, don’t spend more than 2 weeks pay on Christmas gifts. Start putting aside that amount the first week of November.
December: Review your successes for the year and make plans for managing debt in the next year.