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Which is more important for you this New Year, your waistline or your wallet? A survey made by the Allianz Life Insurance Company found out to their utmost shock that while 50% of the Americans are more likely to keep their New Year resolutions tied to their diet, figure and exercise, only 42% said that they’ll maintain one that can lead to better money management and another 80% do not have any kind of financial resolutions on their list.
[FG] And we know how long those fitness and diet resolutions last!
The result of this kind of consumer behavior is primarily due to the over-confidence to control their own financial lives. Majority of the respondents feel that they don’t earn money to worry about future financial planning. 23% of them said that they already have a full-proof financial plan and 20% can’t focus on financial planning as they lack professional advice. Debts are dangerous and they destroy the peace that you had in your personal life. Not only is debt reduction harmful to your credit score, you may also be drained off your wallet while getting out of debt.
[FG] I don’t really get this over-confidence. Remember, you have to be too big to fail to get bailed out. Us little guys can’t expect the same if we can’t manage our finances properly.
Since the US economy began to backslide since the 2008 recession, most Americans were forced to get back to their basic survival mode. The recession has hurt everyone including the wealthy section apart from those who resolved to save money and invest it smartly. Remember, that it’s never too late to start putting your finances at place. If you’re poised to focus on employing some smart money management skills, you can certainly tread on the path to wealth. Have you made your financial resolution for 2012? If you answered no, check out some advice given by some of the famous financial analysts:
- Resolve to save create and follow a budget: Preparing a budget isn’t difficult but it certainly is time-consuming. Though it may take about 2 hours, this time will be well spent. Crafting a budget and sticking to it is one of the most necessary ways of improving your distressed financial situation and avoiding unnecessary debt. The fake promises of the debt reduction companies may seemingly be attractive, but there’s no other short-cut to creating a budget and following it on your own.
- Resolve to pay off debt and get closer to eliminating debt: Are you an avid user of those nasty little plastics that turn out to be debt generators? If you answered yes, you immediately need to shun this habit as credit card debt is the worst possible debt that can attack an American. Credit card debt can adversely impact your credit score and will also jeopardize your future. The interest rate on a typical credit card is so high that you should always save money to pay more than just the minimum monthly payment. If you use such handy tips, you can easily pay off debt quickly.
- Resolve to save money aggressively: This is the main part of planning a budget but it’s more important to justify a separate resolution for saving money aggressively. Give a retrospective glance at 2011 and the big money mistakes that you made that led to your present financial state. They say that one must save at least 10% of what they earn in a month so as to be able to build an emergency fund. Having a cushion to fall back on, is a prerequisite, especially when there’s another recession knocking on your door.
[FG] I like this, and I would even be more aggressive and go 20%, 30%, and up.
- Resolve to save for your retirement: If you’re working and your employer offers a 401(k) plan, you should add a portion of your monthly income to it. Irrespective of a matched contribution from the employer, saving money to lead a fruitful retired life is a must. Stay prepared for the tax benefits and also think about the opportunity to invest your pre-tax dollars that will help your money to grow tax-free.
[FG] If you do have a match, there is absolutely no reason to give up free money.
Though it shouldn’t always take a New Year to get us moving, as the New Year is here, we should embrace this time as the appropriate time to step up and commit to making measurable progress towards all our financial goals. Boost yourself by calculating the amount of money that you can save by staying on top of your finances.
This article was written by Sylvia. She writes content mostly for financial communities and on a daily basis, she performs research on the US market and covers debt, debt relief, saving, investing, budgeting, being frugal and credit cards. If you need any additional information regarding debt you can visit her website at DebtConsolidationCare.com and you can also follow them on Twitter.
The preceding was a non-sponsored guest post by Debt Consolidation Care.