January might be almost ending, but it’s not too late to make the best of 2020 yet. We know that most New Year’s resolutions involve improving health or getting rid of a bad habit. But why not concentrate on the elephant in the room that hinders all your other resolutions. Get out of debt and improve your financial condition. These debt resolutions on your list will help you with that endeavor.
Reduce your debt
Rather than trying to pay off all your debt (especially if you have a large amount), focus on a few key steps, putting together a get out of debt plan. Have your plan created no later than February and aim to pay off 10-20 percent of your total debt by the end of the year. A good debt management planning company like Solution2Debts can help you out.
Recognize your own toxic financial habits. Then, you must consciously decide to keep your spending in check – even if that means leaving your credit card at home. After making good credit decisions for a few weeks, you’ll find that good spending habits start to come naturally.
Improve your credit score.
Your credit score influences a lot of financial future decisions like loans, education, and purchases. It also affects the interest rate you pay. Improving your credit score improves your ability to get good credit card and loan terms.
Don’t max out credit cards.
This is a big financial risk in itself you continuously practice this. You should always keep some available credit not only to protect your credit score, but also to leave room for an emergency.
Pay less interest.
Negotiate for lower interest rates on paying your balance off sooner. Transferring balances to a zero percent interest rate balance transfer credit card can also temporarily reduce your interest payments.
Don’t pay late fees.
Late fees are another unnecessary expense which can be easily circumvented with just a payment schedule and a notification app. There might also be a spike in your interest rate after a 60-day delinquency and a drop in your credit score due to late payments. These negative results can be avoided by paying your credit card bills on time.
Live within your means.
This goal requires pretty big changes. Set a budget and stick to it. Do not keep room for leeway in the budget. Tracking your spending to figure out where your money is going. Don’t dip into savings or use credit cards for everyday necessities.