January is a great time of the year to reflect on the past 12 months. Do you feel you could have made some better financial decisions last year? Could you have saved more and spent less? Are your credit card bills with all those holiday-related charges coming due and stressing you out? If so, take a deep breath. A lot of people are dealing with similar types of financial issues and pressures. But now is the perfect time to take a fresh look at how you can improve your situation and make things better this year.
Ready to get started? Here are four ways you can reduce your financial stress in 2021.
- Establish specific goals
Instead of making general goals such as “I’m going to save more this year,” define specific objectives that you want to achieve. Here are some examples:
- Set up an automatic savings plan and add $50 to your savings account every paycheck
- Make a commitment to pay a certain amount over your minimum amount due toward your credit card. Even better? Figure out how you can pay off your highest interest credit card completely. Could debt consolidation be an option?
- Create a budget – and stick to it!
- Check your credit report
Reviewing your credit report once a year is always important and the growing threat of hacking and fraud makes it even more vital. By examining your credit report you can detect errors, possible identity theft, and more. If you spot inaccuracies or believe you’ve been a victim of cybercrime, you can take action right away.
Reviewing your credit report once a year is always important and the growing threat of hacking and fraud makes it even more vital.
The information that is in your credit report is also what affects your credit score. If you are planning on buying a home or car this year, you’ll want to check your credit report now to avoid problems later. You may qualify for better interest rates if your credit score is higher. So if you find your credit score is on the low side, take the steps you need to raise it. Read our Credit Repair 101 guide for tips on how to improve your credit score.
You can view your credit reports from the three credit bureaus, Experian, Equifax and TransUnion once a year at no charge. Visit AnnualCreditReport.com for more information on how to request your free credit report.
This Omni article has additional information on why checking your credit score once a year should be on your to-do list.
- Hold yourself accountable
It can be difficult to stay motivated when that 50% off sale seems to be calling your name. The temptation to spend can be hard to avoid. That’s why it can be beneficial to share your financial goals with your family, significant other or a trusted friend. Having someone on your side can help you stay accountable. They can provide the encouragement you need to remain focused on your objective.
Share your financial goals with your family, significant other or a trusted friend. Having someone on your side can help you stay accountable.
- Get your paperwork in order
Paper mess and disorder can cause stress. Having your financial documents and paperwork in order and filled out correctly and completely can provide peace of mind. Organize receipts and other financial information you may need for taxes. Make sure you have your most updated home and car insurance policies. Ensure that you have the right beneficiaries on your retirement accounts and life insurance policies. If you are inundated with paper credit card and utility bills every month, consider using online payment methods.
Regaining financial control may seem overwhelming at first. Take it one day at a time. By sticking with your commitment you’ll be able to tackle your financial goals in 2021 and beyond. Good luck!
The information provided in this blog post is for informational purposes only. It should not be considered legal or financial advice. You should consult with a financial professional to determine what may be best for your individual needs.