The last thing you want to think about on NYE is your bank account. Whether you’re spending too much or want to tighten up your budgeting skills, there are many ways to maintain a healthy bank account.
Here is how to get your finances in order this new year.
1. Outline a Budget Plan
If you want to fix your finances, start by creating a budget. The easiest way to break your spending down is by looking at what you’ve spent in each category the last month. Then you can adjust accordingly.
For example, common budget categories include:
- Rent or mortgage
- Savings (e.g. emergency fund)
- Cryptocurrency investments
- Medical care
This is how to organize your finances as it’ll tell you which areas to cut back on. Some of these expenses are fixed every month and others fluctuate. For example, your utility costs vary depending on the season and some months the price of BTC may be extremely low or high.
So if you need to make cuts, aim for a category like groceries or dining as you can take the reigns. To make it easier, use a budget tracking app like Mint so you can monitor your spending.
2. Review Your Credit Card Statement
When you’re managing your personal finances, it’s a good idea to sit with your credit card statement and break down your expenses. You’ll then learn from your past spending mistakes and try harder to avoid them in the new year.
3. Bundle Your Insurance
A great way to improve managing your finances is by using one company to cover your insurance known as an insurance bundle.
You may get a better rate if you combine your homeowner, car, and umbrella insurance policies under one company. But before you take the plunge, read more about plans to ensure it is the more cost-effective option – because every penny counts!
Not sure how to fix your finances?
Unsubscribe from any tech or clothing subscriptions so you aren’t tempted by their constant e-mails. This is easy to do right from the emails they send.
5. Get Out of Debt
Too much debt feels overwhelming so it’s important this is what you tackle first.
Create a debt payment plan where you list your debts in order of the smallest to the biggest. Or you can start from the highest interest rate to the lowest so you know which order to pay them off.
Take the amount you were paying towards the first debt and add it to the payments you’re making on the second, once you’ve paid the first off. Keep doing this until you’ve cleared everything.
Even though it’s tempting, avoid closing credit cards as you pay them off because it can lower your credit score. Instead, aim to have your oldest card open with minimal or zero balance.
Now You Know How to Get Your Finances in Order
Once you know how to get your finances in order, your bank account will look far less scary and you can then invest more into crypto. It’s important to track your finances so you know which areas you need to cut back on.
Instead of forking out for multiple insurance plans, bundle them as it’s often a more cost-effective option. But if you have debt, address this issue first and then everything else will fall into place.
Did you find this article helpful? If so, check out more of our posts and our beginners guide to investing in cryptocurrency once your finances are in order.