Well, we all know that New Year’s resolutions lead more often than not to failure. They are not very often realistic and seek to change behaviors that are often not-so-harmful. That being said, why not take advantage of 2014 to make a reasonable and serious commitment to your finances? While visiting the gym more often this year will certainly do you good, taking back control of your expenses will allow you to pay for your pass for this one! It goes without saying that it is not so easy as a simple resolution. Getting back on top of your debts and expenses requires a commitment. You need to develop a strategy and put it in place. You have to save every penny you can.
Stop compulsive shopping
Supermarkets know your habits; magazines, batteries, gum and all sorts of useless little purchases are placed at the exit to encourage you to leave a few more dollars in their boxes – and not in yours. These purchases may cost just a few dollars each, but they have the power to undo your budget if you’re not careful. No matter the product, compulsive shopping blocks the road to a healthy budget and financial life.
It’s time to discipline yourself. Plan a limit in your budget for your meals at restaurants, personal expenses and to put gas in your car: $ 100 per pay period, for example, will force you to make a choice between your dinner at the local restaurant or the review with your favorite actress on the first page. This kind of choice will inevitably lead you to better evaluate how you spend every dollar you earn.
End bad habits
You have certainly realized that all the “good” bad habits are expensive: the cigarette, the wine, the game … This kind of habit can quickly annihilate all your good progress towards a balanced fiscal life. With this reality in mind, why not combine your resolutions and straighten your budget by undoing an unhealthy habit? If, for example, you stop smoking and you take the money you spend on your cigarettes and put it in a savings account, the success of real savings and improved health will give you twice as much money. satisfaction and strengthen your sense of accomplishment.
Overpay your mortgage
Once you have all these great habits in place and you start to accumulate a great savings, you might be tempted to take advantage of that money to celebrate your success with some sort of outing or entertainment. Remember, before celebrating in your favorite five-star restaurant, only one party can erase all your good work and force you to start from scratch.
It may not be as appealing as a gourmet meal, or as entertaining as your favorite artist’s next concert, if you apply your savings to one of your existing accounts (such as a debt still unpaid, or, yes, your mortgage), you will be able to grow that sense of accomplishment that you feel by staying true to your financial responsibility resolution. In addition, overpaying your mortgage can reduce your long-term interest costs by thousands of dollars and can also reduce the total mortgage term dramatically.