At the start of a brand new year, brand new resolutions usually take place (or old resolutions as the case may be). In this day and age, we never know what is going to happen with the economy; authorities say the recession is over, but many, many people are still being laid off, unemployment is at an all time high, the dollar is at an all time low, and the majority of American citizens are in debt. As we continue to take the plunge downward (or pull ourselves up, depending on who you listen to), many people have decided to take control of their own finances.
Let's take a further look at one of the Most Common New Years Resolutions of 2011 â€“ managing your finances.
Making More Money
The two most common resolutions of this year, and a number of years before, is losing weight and making money. The biggest reason that making money is so popular is because so many people don't have enough of the green stuff. Money resolutions entail many aspects of money including getting a better job, paying off old loans, being free of debt, saving more money, investing more money etc. Most Americans have some form of debt and many of them have realized that it is a vicious cycle; once you get into debt it can be extremely difficult to dig yourself out as the interest you have to pay eats into any progress you try to make. Let's say you owe $10,000 in credit card debts and your interest is 21%. Out of your $200 minimum payment, $174 is interest. It is very common to be quite a bit of debt, in fact, by the time the average American gets out of school, they are about $40,000 in debt. And this is before they have even gotten their job yet!
The other aspect of the money resolution is saving more money or getting a better job. In present times, you can never tell if or when you will be laid off from your job and it is nice to have a bit of an emergency fund for you to fall back on. This is especially true if you have outstanding debts or are living pay check to pay check. If you suddenly lost all your income, would you have enough to get by? If you got laid off your job, would you even have enough to survive a couple months until you became approved for employment insurance? It's good to think about things in advance and prepare yourself for what might happen to you or your family financially. Try not to take drastic measures unless absolutely necessary as these are difficult to hold for long periods of time. Try instead to put away 10% of your income away in a savings account, or invest it in something that can multiply your return on investment. This isn't that big of a chunk of your income and you can survive without it, but it will add up in the long run as long as you are consistent with your methods.