Nearly every family suffers from some sort of income instability at one point or another. Working toward financial freedom and security is a tough thing to manage. But it can be done with some simple tips you can apply to your life no matter what your current income or debt status may be. These 5 easy tips for financial stability in the new year will hopefully get you on the right track to meeting your financial goals.
Tips For Financial Stability In The New Year
1. Create a functional family household budget. If you don’t have a good solid family budget, then you are setting yourself up for failure. A budget is simple a means of tracking incoming and outgoing money. You want a column that shows what money comes in on what days, how much and from where. Next you have a column or columns showing all of your expenses. This includes the mandatory bills like rent, utilities and food, as well as miscellaneous things like gift costs, parking passes, entertainment and more. At the end of your budget you should ideally have money leftover at the end of the month. If you are seeing your expenses outweigh your income, then you need to eliminate expenses or change or add another income source to your budget. Here’s how to make a Simple Budget – Simple Budget & Worksheet
2. Evaluate policies and plans. One simple way to boost your budget, and make sure you are covered for emergencies is to take the time to evaluate policies and plans you currently pay for. Everything from your health insurance to your vehicle insurance, life insurance policy or even service agreements on your heating unit, cellular phone plan or roadside assistance plan. Make sure you are paying the least amount for the best possible coverage. It’s also a time to look into investing in security plans for things like credit card balances, and even potential disability insurance through someone like Aflac. Being prepared for an emergency is the ultimate in financial security for your family.
3. Create a savings account. Just like we mentioned in the last suggestion, you want to be prepared for an emergency. That is precisely what savings accounts are all about. While you could have multiple savings accounts for multiple purposes, it is important to have one dedicated solely to being an emergency fund. At the minimum you want enough to cover your basic household expenses for at least one month, but 6 months of living expenses is the ideal amount. However, I realize that can be very difficult for most people, so do what you can. Something is better than nothing! Start with even just $5 per week and start putting aside that money into savings to build a functional savings for any emergency. Increase what you put in as you can, and even utilize things like bonus checks, tax refunds, money from things you sell and similar to build your savings.
4. Put your tax refund to good use. If you are in the tax bracket to receive a refund check this year, now is the time to start planning how you will utilize those funds. You need to think wisely about this, as it can be very beneficial to your ultimate financial security in the new year. Suggestions that are often popular include paying off debt, paying off a vehicle loan, paying for health or other insurances for an extended time period (6 months to one year), paying for needed household repairs, or not using it at all and instead putting it into a savings account to use later as needed. Try to use this money to get ahead instead of buying “wants”!
5. Get realistic and honest about spending habits. This is the biggest thing to really help you find financial freedom and success. You have to get really honest with yourself and perhaps even your spouse about your spending habits. Start tracking those afternoon coffee stops, the occasional new clothing purchase habit that has turned into a weekly habit, and even the splurges for entertainment and eating out. Evaluate what is of importance to your family, and eliminate things you can do without to help better your financial situation. You may want to check out my posts in my Frugal Living Category for more money saving tips!
These tips for financial stability in the new year are basic concepts that can easily be adapted to any budget or income level. It can be hard to imagine financial stability if you are living paycheck to paycheck, but it can be managed when you apply these and other basic financial principles.
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