As we move into the new year, many people are gearing up to pursue new resolutions. While New Year’s resolutions often reflect our wishes for the upcoming year, this time they may also set the tone for the new decade. Getting your finances in order in 2020 will have lasting effects on your long-term financial goals. Through proper planning, you can create a budget. That is why we have compiled the following list of helpful tips for how to manage your finances in 2020.
1. Crunch the Numbers
Take some time early in the year to simply sit down and do the math. Look back at your spending and saving practices over the past year. Take note of your monthly income and determine your monthly expenses. Consider which of those expenses are necessities and which are more flexible. From here, you can figure out how much disposable income you have and where you could tighten your expenditures to save money.
Next, figure out what your financial goals are for the year, or even for the next few years so that you can devise a realistic budget and plan of action. As soon as you have your goals nailed down, you can work out a budget to achieve them by cutting back on frivolous or unnecessary expenses. Check in on your progress regularly to make sure you are staying on track.
2. Put Money Into an Emergency Fund
It is always advisable to stow away a small portion of money each month, or as frequently as possible, to prepare for the unexpected. Sometimes life just happens, throwing you an unexpected financial curveball. Having a nest egg in place will prepare you for these tough situations.
To start an emergency fund, determine how much surplus income you have per month after accounting for fixed expenses. From this figure, you should dedicate a small amount to your emergency fund each month. Try not to dip into it unless it is an emergency!
3. Check Your Credit Report
Credit reports compile valuable information about your financial situation and display it all in one place. Checking your credit report will help you identify any late payments, loans, or collection agencies associated with you. Credit reports are also useful for spotting inaccurate information or unauthorized accounts set up in your name. In 2020, keep an eye on your credit report to make sure the information listed is accurate, up-to-date, and not the result of identity theft.
You should also keep an eye on your credit score. Having a low credit score may hurt you when trying to do things such as rent an apartment or take out a loan. Fortunately, credit scores fluctuate. Low scores can turn into high scores with proper planning. If you are struggling with debt, and your credit score reflects this, speak with an attorney to learn how to get back on track.
4. Consider All Your Financial Planning Options
There are some financial planning options that are often left unconsidered because of a common taboo. For individuals who face overwhelming debt, filing for bankruptcy may be the most favorable course of action.
Bankruptcy may alleviate the ills of long-term debt, such as wage garnishments, creditor harassment, foreclosures and repossessions. Declaring bankruptcy may help you protect your most valuable possessions, like your home or vehicle. In many cases, bankruptcy also affords people the chance to maintain and rebuild their credit scores.
If you own a business, handling overwhelming debt may require filing for Chapter 7 or Chapter 11 bankruptcy. Speaking with an experienced Kansas City bankruptcy lawyer will help you determine if these options are right for your business.
Need Help with Your Personal Finances? Contact Our Kansas City Bankruptcy Lawyers Today
If you are wondering how to manage your finances for the upcoming year, the Sader Law Firm may be able to help. Our practice areas involve many financial facets, ranging from consumer bankruptcy and business bankruptcy to student loan debt help. For your free telephone consultation, dial (816) 281-6349 today.