Resolve to get your finances in order

Published on Friday, 5 January 2018 12:25 - Written by MECHELE AGBAYANI MILLS, Better Business Bureau

The new year is underway, and spending less/saving more ranks high on the New Year’s resolutions list year after year. According to a recent study conducted by Principal Financial Group, a Better Business Bureau-accredited business, the top financial blunders in 2017 included not saving enough money, accumulating credit card debt and taking on more debt. If one of your resolutions is to create a budget or get out of debt, the BBB has some tips and tools to help you get on the right track to a better financial future.

By committing to a few simple items, you can set yourself up for a financially fit future.

The BBB offers the following tips to help you get on the right track to a better financial future:

- Calculate your income. You can’t properly set a financial resolution unless you know how much income you have. Calculate your monthly net income, which is after taxes, so you can set a clear budget with exactly what you are bringing home.

- Track your spending. Whether you prefer an app, computer software or a notebook to jot down your expenses, keeping track is critical. It helps you see where you are actually spending your money, rather than where you think it’s being spent.

- Categorize your spending. Create categories based on necessities (housing, utilities, food, transportation) and luxuries (entertainment, dining out, travel). If you have credit card balances, student loans, car payments or other debt, make “debt reduction” one of your necessary categories.

- Set up a budget. Once you have an idea where you are spending money, you can set up a realistic budget. There are free online tools to help you, so there is no need to spend a lot of money on budgeting software. Be cautious of scams, however, and never share personal identifying information unless you are sure of the site’s legitimacy.

- Pay down debt. One method is to pay off the credit amount or loan with highest interest rate first (the “ladder method”). Another is to pay off the smallest balance first so you feel a greater sense of accomplishment (the “snowball method”). Use whichever method works best for you. The important thing is that you are doing it.

- Pay bills on time. Consider online bill-paying that eliminates writing checks, buying stamps, etc. Automatic payments can be scheduled ahead of time and can help you avoid late fees and penalties for missed or tardy payments.

- Save for the big things. Big purchases, such as vacation or holidays, can easily blow your budget. Avoid going into debt for these expenditures by saving up ahead of time and only spending what you are able to save. Many banks and credit unions offer savings clubs that might help.

- Save for emergencies. Emergencies like car or home repair, unexpected medical expenses or job loss can blow your budget. Financial experts suggest an emergency fund of three to six months living expenses. If that is too ambitious, start smaller and build up.

Clearpoint Credit Counseling Solutions, a BBB Accredited Business and national partner, offers a budget calculator to help you create a budget.

For more tips on how to be a savvy consumer, go to To report fraudulent activity or unscrupulous business practices, please call the BBB at 903-581-5704 or use BBB ScamTracker.