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Resolve to
Improve Your Finances in 2004
by James H. Dimmitt
Kick off 2004 with these 7 money resolutions and get a fresh
financial start to the new year. At year's end, you'll be surprised at how much
you've reduced your debt load and the money you've saved!
1) I will create and use a budget.
A budget helps you see exactly where your money is going from
week to week and month to month. Creating and using a budget, no matter what
your income level, will help you reach your financial goals more easily than
without one.
2) I will use my budget to help reduce my credit card debts.
Let's say you are able to save $20 a month by budgeting your
money. You could take that $20 and place it in a savings account where you would
earn minimal interest. Or you could use that same $20 and add it to your
budgeted credit card payment reducing your credit debt in two ways. You'll be
reducing the amount you owe your creditor and you'll also reduce the finance
charge on next month's bill.
3) I will pay more than the minimum due on my credit card bills.
If you just pay the minimum due on credit card bills, you'll
barely cover the interest you owe. It will take you years to pay off your
balance and you'll end up spending thousands of dollars more than the original
amount you charged.
4) I will make my payments on time and avoid late fees.
Making late payments adds to your debt load and may increase the
annual percentage rate (APR) your creditors charge you. Additionally, late
payments are reported to the credit reporting agencies and negatively affect
your credit rating.
5) I will not use my credit card at an ATM or a bank for a cash
advance.
Cash advances on credit cards are assessed special fees and
higher interest rates than what you pay for purchases made with your credit
card. Creditors apply the majority of your monthly payment to your purchase debt
rather than cash advance debt which increases the overall amount of interest
you'll pay to your creditor.
6) I will spend my money sensibly.
Using your budget, you may find that you're spending a good
chunk of your income on discretionary items: morning coffee and donut, a weekly
magazine, fast food lunches, etc. Each purchase seems like a small amount of
money at the time, maybe $3-5. But these small purchases add up quickly and
amount to hundreds of dollars a year. Ask yourself if you really need these
items and reduce your amount of discretionary spending. Use your savings to pay
down credit card debt.
7) I will live within my means.
Are you an impulse buyer? Do you use your credit cards to
supplement your income? Do you feel the need to have the latest fashions, cars,
stereos, etc.? If you answered yes to any of these questions, chances are good
that you are overspending. And overspending means more debt - debt that will
keep you from achieving your financial goals.
©
www.yourfreecreditreportnow.com Author: James H. Dimmitt James is
editor of "To Your Credit" a FREE weekly newsletter for consumers. You can
subscribe at http://tinyurl.com/bgo9
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