**This is a sponsored post. All opinions are my own and are not the opinions of TransUnion.
With the New Year just quickly approaching, it’s time to start thinking about those resolutions. Most people tend to make New Year resolutions at the last minute which usually means they end up being broken by the end of January.
To keep things on track, I recommend you start thinking about your resolutions now so you come up with ones that you can stick to. Still not sure where to begin? How about trying these five financial resolutions in the new year.
Make a budget
January might be the toughest time to make a budget since you’ll be getting your credit card bills from the holidays, but you need to start somewhere right? First off, start tracking all your expenses for the month. You’ll literally want to log everything you spend money on. Once you have all that data, you can come up with a realistic budget. Take your income and then subtract your fixed expenses. With the money leftover, you can decide what your money goes towards such as savings, entertainment, clothing, etc. Remember, budgets can change, so don’t feel bad if you go over budget one month. The idea is to find that sweet spot where you’re meeting all your saving goals.
If you have any consumer debt, reducing it should be your number one priority. I personally recommend starting with your highest interest debts first (known as the debt-avalanche method). By doing this, you’ll pay less interest in the long run. The alternative method which is known as the debt-snowball method is to clear the debt with the lowest remaining balance first before moving onto the next one. Hopefully, you’ll get a little mental boost every time you clear a debt which should encourage you to pay off the rest of your debts. Remember to pay your credit cards in full each month to avoid picking up any additional debt.
Monitor your credit
According to a recent study from TransUnion, nearly 40% of Canadians aged 18-24 have never checked their credit score. Your credit score and history can have a huge effect on your ability to take a loan and can affect the terms and interest rates of the loan. So if you are considering a major loan in the future or even a new credit card, you’ll want to make sure your credit reports are accurate and up-to-date. Start by checking your credit reports to see if there are any inaccuracies. If there are, request updates or corrections. If there is any suspicious activity, flag the activity to the two major Canadian credit bureaus right away since that might be a sign of identity fraud. To help maintain and monitor credit throughout the year, TransUnion offers a credit monitoring service that will track and alert you when there are key credit report changes to your credit report.
Here’s a simple financial resolution for the new year – educate yourself on personal finance. Trust me, it’s much easier than it seems; all you need to do is read a book. Some of my favourite personal finance books for Canadians include The Millionaire Teacher by Andrew Hallam and Wealthing Like Rabbits by Robert Brown. Both books are easy to read and will help you understand your personal finances. If you read just one of these books, you’ll be doing better than many other Canadians.
Automate your savings
Since your budget is made and you’ve set aside money for savings, you can take things a step further by automating it. Every bank allows you to set up automatic transfers so you can set it and forget it. If you can time those transfers to when you get paid; you’ll never notice the money missing. Automatic transfers guarantees you’ll be meeting your saving goals. If you want to challenge yourself, try to increase your savings every month. This will require you to be diligent with your budget, but you’ll be saving much more money.
For more tips, check out TransUnion.ca.
**Results come from the Toluna consumer field study – July 21-25 commissioned by Trans Union of Canada, Inc.