Financial security may not make it to the top of New Year’s resolution lists — at least not by name. But behind every promise to pay down debt and save more money, there’s the goal to become more financially secure. Whatever that means to you, these financial tips can help you strengthen your financial safety net in 2024.
1. Have a Budget
A budget gives purpose to your spending, so you don’t accidentally waste money on new shoes when you need it to make an urgent household repair.
You should sit down with your finances in the new year to establish your spending rules. These should include the essentials that you must pay every month, like housing costs and groceries. Expand from there to determine what fun things you want to prioritize each month.
Balance is the key to a successful budget. If you aren’t sure how to strike a balance between your essentials and want, try out the 50/30/20 method. This budgeting method establishes spending limits on your essentials, wants, and savings, giving you clear objectives for each category.
2. Set Aside Savings in an Emergency Fund
An emergency fund is the cornerstone of the average financial safety. These savings provide a cash cushion for when your budget isn’t accurate, like when you didn’t think to anticipate prescription medication or new brakes in your spending.
A robust emergency fund may take a lot longer than a year to build. After all, most financial advisors recommend you save as much as six months of living expenses in this saving account.
Try not to let this long-term goal overwhelm you. Focus on what you can do to make frequent, regular contributions to your fund instead.
3. Take Out a Line of Credit
Until you build up to this level, your savings may fall short of what you need in an emergency. This realization may be uncomfortable, but it’s a necessary one to have. By acknowledging your shortcomings, you can prepare a backup to your emergency fund.
A line of credit from Fora may become your backup in emergencies. To see if you can borrow money online from Fora, check out what you need to qualify. Get all your information ready so that you can fill out an application easily and quickly.
4. Always Pay More Than Your Minimum
Most people will tell you that you should never draw against your line of credit if you can’t afford to repay all of it by the due date. But what about urgent expenses that you can’t ignore and that you can’t afford? Sometimes, it makes sense to put this large expense on your line of credit and pay it back in installments.
In these situations, you should always pay off your outstanding balance as quickly as possible. Go back to your budget to see what spending you can reduce to boost these payments. Any sacrifices will be well worth it — they can help you pay your balance off in fewer installments and pay less interest on your balance.
5. Shop Around for Insurance
In all likelihood, you already have a few insurance policies to your name. After all, auto insurance is often a legality of owning a car, and the same goes for home insurance and owning property.
However, you should take the time to review these policies to ensure two things:
- You’re getting the best coverage for your needs.
- You’re paying the lowest price for the coverage you need.
Shop around to compare policies and prices to ensure you aren’t overpaying for this crucial safety net.