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Start the New Year off The Right Way

Develop a Spending Plan

If developed and implemented correctly, a budget will reveal weak areas and ultimately will make you live within your means. However, according to surveys, only 30% of Americans prepare a monthly budget that tracks their income and expenses.

That leaves 70% of consumers who may have no real means of assessing their finances and implementing more responsible spending habits. That’s crazy, especially since tracking expenses is now so easy to do.


Get Out of Debt

About half the families that have credit cards carry a specific balance. Your statement now tells you how long it will take to pay off that debt if you make only the minimum payment each month.

For example, if you owe $2,800 on your card and have an 18 % interest rate, making only the minimum payment — $56, or 2 %— means it will take you nearly 30 years to pay that off the card. Along the way, you’ll pay nearly $6,800 in interest.

Don’t fall victim to this trap. Instead, develop a debt-management plan that can use funds from your budget. You can pay off that debt in a year with a monthly payment of $250 and pay only $288 in interest. That’s a savings of roughly $6,500.


Cut your Budget Busters

Little luxuries may seem inexpensive, but they add up quickly. Try to cut adjustable expenses, such as coffee drinks, smoking, gym memberships and cable TV. Shaving down your $3 caffeinated beverage from five cups per week to two cups per week can save you up to $468 per year.


Quit Drinking Alcohol

There’s nothing wrong with an occasional night out with the guys or gals, but beware of the bar. Consuming alcoholic beverages in public venues can be quite costly, especially if you go when it’s not happy hour. And let’s not even consider what getting a DUI could cost you.

OK, let’s consider it after all: Up to $15,000 or more.


Adopt a Healthier Lifestyle

Not only is an active and healthier lifestyle beneficial to your well-being, but it also helps your pocketbook. A healthier you is less likely to need prescribed medications, physician visits and treatments.