You banked your holiday bonus and landed that raise you’ve been hoping for, but the post-holiday bills are coming. You may be wondering what more you can do to ensure you’re on the right track financially in 2016. Fortunately, you can do a lot right away to start the year off strong.
* Reassess your budget; if you don’t have one, make one. A budget is an essential tool for planning how you will spend, save, invest and enjoy your money. It should be a guideline to how your money will work for you, but it’s not written in stone. Life changes, and outside influences mean you need to periodically examine and update your budget. Start by jotting down your financial goals for the year, then review your budget to see if it’s going to help you achieve those goals, or if you need to make adjustments.
* Pay off holiday bills immediately, and if that’s not possible, then as quickly as you can. Each month you carry a balance on a credit card, interest rates increase the actual out-of-pocket cost of those holiday gifts you purchased. If possible, pay balances in full right away during the month of January. If that’s not possible, create a payment plan for yourself with the goal of paying off the total balance in as high an increment as you can afford, so you minimize the time you’re carrying a balance.
* Maximize “found” money. Gift cards have been the most-requested holiday gift item for nine years running, according to the National Retail Federation, but not everyone uses all the cards they receive. A survey by Coinstar Exchange found 37 percent of people who received gift cards in 2014 still haven’t used all of them. If you have gift cards sitting around, they can be a great source of “found” money. Take your gift cards to a bright yellow Coinstar Exchange kiosk at your local grocery store and exchange them for instant cash. Put the extra money toward paying off holiday bills, boosting your emergency fund or for something you really want or need.
* Review all your credit accounts. Even the most careful shopper can fall prey to crooks, who are particularly active and crafty during the holidays. Look over your credit card statements to ensure you authorized all the charges that appear on them. For an extra layer of safety, check your credit report; it can help you detect signs of identity theft or other fraud as quickly as possible.
* Increase your savings. By now, you’ve reviewed your budget and cashed in your unused gift cards, so you’ve got some extra money in your pocket. Instead of spending it, use that money to increase your savings. It’s especially important to have an emergency fund equivalent to a few months of living expenses. Those savings can help protect your financial health against unforeseen circumstances like a big auto expense or home repair bill, or even job loss. While it’s always great to save more, setting aside even $10 a week can have a big impact on your financial future.
Many financial goals require long-term planning, but others can be done quickly and easily. These simple, do-it-now steps can yield instant gratification, and help ensure you get a good financial start in 2016.