Money management is difficult and many people resolve to budget better as the new year starts. Devan Wallen from Financial Partners in Knox says the first step to a better budget is to cut out unnecessary expenditures.
“Probably one of the first things you can do is to rid yourself of the non-necessity things. A lot of times people engage in bad habits like smoking, drinking, dining out, and shopping too much and that can cause quite a hindrance to the budget,” said Wallen.
Credit card bills can be overwhelming, especially after the Christmas holiday. Wallen suggests cutting credit cards out completely.
“I know that’s hard to do because sometimes people utilize those cards for the bonuses and the points that are given through those cards. Sometimes if they buy online that’s the only option that they have. If that’s the case, a lot of times we tell people to treat your credit card as a checking account. Keep a register so that way you have a list of the transactions and you know the amounts and it doesn’t catch you by surprise when that monthly statement comes due.”
If you have a high interest credit card, Wallen encourages you to pay a higher amount on that card to get payments under control.
“Do everything in your power to focus on getting rid of that high interest rate card – meaning paying the minimum on the low interest rates and paying a larger lump sum on those higher interest rate cards, or higher interest rate debts, to get those paid off faster. Interest can accumulate very quickly and a lot of times that can bury people financially.”
Once you have a plan in place, it’s important to maintain a household budget.
“Stay under budget on things. A lot of times that’s difficult because you have unexpected expenses. That’s why it’s important to have a basic savings plan. Probably a thing to think about is to just be humble in your spending. Do whatever it takes to save money to get you ahead in the long run.”