BRYAN, Texas (KBTX) – Financial goals are often at the top of the list of New Year’s resolutions.
Nick Kilmer is the Assistant Director of the Texas A&M Money Education Center. He joined Brazos Valley This Morning to offer you the first steps towards your 2022 financial goals:
- Budget your money – Budgeting is not fun for most of us, but it is the cornerstone of wealth growth. The convenience of credit cards and automatic payments just makes spending too easy, so this new year start tracking your income and expenses and find out where your money is going. If you just don’t have the time, consider using an online budgeting app that will do it for you, like Mint.com, Personal Capital, or Dave Ramsey’s EveryDollar.
- Pay yourself first – If you’re trying to build an emergency fund or save for that summer trip to Florida, consider paying yourself first. Have your checking account automatically transfer $ 20, $ 50, or $ 100 to your savings account after each paycheck to force you to save first and then live on what you have left. This will force your spending habits to align with your savings goals, rather than the other way around.
- Increase your credit score – A higher credit score could save you thousands of dollars on your next car or home loan. So start increasing your credit score now by using your credit card at least once a month, using less than 10% of its credit limit, and paying off the balance in full each month. If you’ve been a good borrower, you can also contact your credit card company and request an increase in your credit limit. All of these will lower your debt to credit ratio, thereby increasing your credit score.
- Monitor identity theft – Federal law allows you to get a free credit report from each credit bureau every 12 months. Visit annualcreditreport.com to see yours. If you notice fraudulent activity, follow the steps on Identitytheft.gov to report it and start repairing your credit score. You can also “freeze” your credit reports so that others are not approved for new debt in your name.
- Pay off your student loans – Good news! The repayment of federal student loans has now been postponed to May 1. Hopefully this extension will give you the chance to focus on your other bills and savings goals for the next few months. But repayment is approaching, so visit studentaid.gov this spring to find out who your service agent is, then give them a call and discuss other repayment options (such as an income-based repayment plan) if you’re worried about pay off your student loans in May.
- Finally… Don’t forget to celebrate your financial gains in 2022. Mental and financial well-being go hand in hand, so whether you’re paying off your credit card or buying a new car, go out to dinner or throw a party to celebrate. Marking your accomplishments with a bit of fun will make them all the easier to remember over the years.
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