At the start of a new year, millions make resolutions — goals they want to reach throughout the upcoming months. Getting a handle on money issues is usually near the top of many such lists. If you’re starting off the new year with a list of resolutions, consider adding some financial to-dos, such as improving your credit score and making a plan to pay off your credit card debt once and for all.
Determining your goals is a great starting point to improving your finances, and the next step is to take action. Below, we share the top 10 financial New Year’s resolutions and offers advice on how you can achieve them.
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Improve my credit score
If you have a less than stellar credit score (below 600), make it a priority to raise it in 2022. You can improve your credit score in several ways, including: paying your bills on time and in full, paying off debt, limiting how many new accounts you open and cutting back on spending.
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Create a personal budget
For some, a budget can feel constricting, but tracking your spending can be a useful tool to help you understand where your money goes each month and why you always end up broke two weeks before payday. A clear budget can help you set guidelines for what you can afford to spend and help you identify areas where you could cut back.
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Pay off a credit card entirely
If you’re struggling with credit card debt, you’re not alone. Credit facilities such as credit cards, overdrafts and store cards make up 65% of South Africans’ credit account. Many South Africans are finding themselves in a position where they use credit cards or overdrafts as a pot to dip into when they run out of money before payday. Focus on paying off the credit card with the highest interest rate first and pay more than the minimum amounts required.
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Use financial windfalls wisely
Commit raises, bonuses or other financial windfalls to debt reduction rather than adding these funds to your monthly spending pool. This can be difficult when you feel like treating yourself for these achievements, but keep in mind that using this “extra” money to chip away at your debt can help you reach repayment goals faster.
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Ask for help sooner
Financial stress weighed on many of us during 2021. When someone is struggling with finances, psychologically it can be damaging to their ability to connect to the confidence and creativity that are crucial aspects of becoming financially stable. Mental health concerns can interfere with an individual’s ability to work and function in a job, which has an adverse impact on income generation.
There is no shame in asking qualified professionals to assist you in reaching your financial goals in 2022. A qualified debt counsellor, for instance, will be able to review your current financial situation, negotiate with creditors on your behalf and work out a simple payment plan to address your debt.
If your goal is to end this year with less or zero debt, get in touch with our team at DebtCare by sending an email to wecare@debtcare.co.za or phoning 0861 977 873.
