Lose weight and get organized. Those are the two most common New Year’s resolutions among Americans, according to University of Scranton professor Dr. John Norcross. Spend less money and save more came in third, which goes hand-in-hand with organization. Regardless, only 8 percent of New Year’s Resolutions come to fruition. New Year’s resolutions seem to be fleeting. But there are several permanent lifestyle changes that can transform your entire financial outlook for the better. Here are three simple tips To take control of your finances.
Car Assessment- Tips To Take Control Of Your Finances
Data from the Bureau of Labor Statistics says Americans spent 17 percent of their earnings on cars in 2013. The conditioned mantra many Americans live by for higher social status is that they have to drive the newest, best thing. You need transportation to-and-from work. You want the new Hummer that was so eloquently advertised on television. Once you can separate wants from needs, you’ll start saving money instantly.
Brand new automobiles lose 9 percent of their value as soon as you drive it off the lot, according to Edmunds. One year later, the value is 19 percent less. By year three, its lost 42 percent of its value. Simply put, new cars are one of the worst investments you can make. The third year of car ownership should be dedicated to long-term maintenance and repairs, while looking forward to eliminating car payments and high insurance premiums.
Cars.com recommends transmission service at 50,000 miles. This includes changing the fluid, gasket and cleaning out any loose debris. Do the penny test on your tires by placing it into the tread with Lincoln’s head facing down. If his head disappears completely, your tires are still good. Anything less than that means a new set is needed. Don’t buy the most expensive tires, but also don’t go cheap. Brands like BF Goodrich fulfill that happy medium. A radiator flush and brake inspection are also recommended at this time.
Credit Crunch
A data analysis by Nerd Wallet found that the average American household carries $7,283 in credit card debt. Hypothetically if you paid only the minimum monthly payment at 18 percent interest on said balance, it would take 26 years to pay off. The payoff balance would total $10,298 with interest.
Credit cards should be thought of as emergency funds used only when necessary. Never use credit cards for anything that is consumed, including gasoline and food. Emergency home repairs, car repairs, medical issues or even helping a family member out qualify as smart credit card transactions.
Make it a priority to pay off credit card debts ASAP. Doubling the minimum payment in the above scenarios cuts the payoff time down to two years, and slashes interest payments by more than half. You can create funds to pay off credit cards by replacing all light bulbs in your home with Energy Star-rated bulbs and unplugging all appliances and electronics when not in use. These activities alone will lower your utility bill by 15 percent or more.
Consider increasing deductions on your W-4 calc at work. This will cause the government to withhold less from your earnings, thus giving you more take-home pay. You may owe taxes the following year, but the credit card interest savings over time make it worth it.
Student Loans
The Project on Student Loan Debt estimates the average borrower in 2013 carried $28,400 in student loan debt. Despite the debilitating effects student loans have on budgets, its important to make on-time payments to potentially take advantage of all the new forgiveness programs.
Consider getting a job in public service. This includes federal and state agencies, along with nonprofits. As part of the Health Care and Education Reconciliation Act of 2010, public service borrowers can get the remaining balances of loans discharged after 10 years of on-time payments. Teachers also have early loan forgiveness options. All borrowers are eligible for balance forgiveness after 20 years, but again, payments must be on-time throughout the life.
The key to reforming financial priorities is changing habits. Take care of what you need, limit acquisition of the things you want and everything else will take care of itself.
