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Now is the Time to Get Ahead

Can you believe the first quarter of the year is almost over?  Pretty soon before you know it, summer will be here!  While I certain will welcome the warmer weather, but if you had any plans for financial improvement as a resolution, I hate to break it to you, but if you’re putting off to this point you may not be off to a good start.  With a few changes right now, you can not only set yourself up for success in the months going forward, but also the years and decades to come up until retirement.

Create a Budget

If you don’t know exactly how much you’re spending on a monthly basis, the first move should be to pull last month’s debit or credit card statement and actually go line by line to see what adds up for bills, food, gas, and of course, spending money.  From there you can decide what your target should be for each category and work on putting together a budget with the goal of having more leftover at the end of the month.  You can also build in vacations and even Christmas shopping into the budget so there is less of a blow all at once.

Reduce Unnecessary Spending

As you look to free up extra money every month you can make some cuts, some more difficult than others.  By reducing going out to eat, or even cutting your cable bill, you can free up hundreds of extra dollars per month.  Since you have the bank and credit card statements out, add up all of the charges that probably should have been avoided, just to see what that total is.  You’ll probably be in for a shock at what you could have saved, giving second thought to all upcoming purchases.

Don’t Forget to Pay Yourself

Now that you’re honing in on spending a little more and seeing more and more freed up, don’t forget to pay yourself in a couple of ways.  First, while it will likely take time to build up, but giving yourself a cushion of a few months’ worth of reserves is a great way to have funds available in an emergency.  Second, as you see extra money become available, hopefully you can start increasing retirement contributions each year.  You can also check at work to make sure you’re putting in the maximum of any employer-matching contributions, otherwise that could be missing out on thousands a year, and even more over time until you retire.

Keep an Eye on Your Credit Score

While sure, the dollars and cents matter, but don’t forget about the interest rates that you’re paying back on the mortgage, auto loan, or even your credit card.  Your credit score is the leading factor in not only your terms, but also whether you’re approved or denied in the first place.  It’s good to review your full credit report at least once a year to ensure its accuracy, but you can now monitor your credit score on monthly credit card statements to make sure that there are no dips that could cost you over time.

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