A new year is a time to make promises.
For many people, that means promising to get their finances under control. Whether it’s saving more or getting out of debt, Nicole Williams, a partner with Executive Planning Group in Camp Hill, says planning is the key.
People get themselves into trouble because they don’t plan how they’ll spend their money, especially over the holidays, said Williams, who specializes in helping women improve their financial health. But a little planning can help women climb out of debt as well.
- Take a snapshot of where you are, in regards to your financial commitments. It’ll be scary, but make a list of every debt: credit cards, student loans, mortgage, car payments.
- Make a list of the money that’s coming in.
- Track everything you spend, noting whether it’s a fixed expenditure or a discretionary (and perhaps avoidable) one.
- Create a budget, adjusting discretionary spending until there’s more money coming in than going out.
- For credit card debt, ask creditors if they’ll lower your interest rate. Never skip a payment and always try to pay more than the minimum payment. “The minimum payment is never going to get you out of debt,” Williams said.
- If the debt is truly overwhelming, consult a debt consolidation company, which will take all of your debt and condense it into a single payment each month.
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Once the finances are under control, keeping them in line can be difficult.
- Prepare for debt, disability, divorce or a lawsuit, the four disasters that can derail a financial plan.
She recommends considering how your bills would be paid if you were suddenly unable to work for a few months. If there’s not enough in savings, try to put money away.
- Consider the value of any benefits your job may provide.
- Consider purchasing additional insurance if you find that a sudden illness could upset your financial plan.