Well, it’s that time of year again! The gym has gotten crowded and our bathrooms and kitchens are sparkling. But whether our resolutions are about health or wealth, many people will find themselves slipping off track over the next few weeks.
So are you ready to make 2012 the year that you put your finances in order? Then read on, because we have some tips for you!
1. Know What You Spend – Check your receipts and understand what you spend! Then set limits for yourself. Whether you have monthly spending guidelines or a spreadsheet solution, this is the place to start.
2. Understand Your Debt – Does your budget include payments on your credit card balances? If so, find out the interest rate on each of your cards, and sort your cards from highest-rate to lowest-rate.
3. Plan the Payoff – Use your budget to identify extra cash that you can use to pay down your credit card balances faster, starting with your highest-rate cards first. How much extra can you pay each month above your minimum?
4. Don’t Get Distracted – Just as important, remember that there will be weeks when you have unexpected expenses. That’s OK! That’s why you’re making a resolution for the whole year – take a second to breathe, and then get back on track as quickly as you can.
Of course, we would be remiss not to mention that getting a loan through Prosper can be a great way to pay down your higher-rate balances more quickly (and to simplify with a single monthly payment). We encourage you to check your rate if you haven’t already.