As 2023 comes to an end, you might have already begun thinking about your New Year’s resolutions. Nearly 53% of Americans make resolutions to pay off debt; however, only 9% of individuals actually achieve their goals. This doesn’t have to be the case with your debt. In this article, we’ll cover tips on managing expenses, budgeting, and maximizing your funds. This is the year for you to have financial freedom! Dreaming of a Debt-Free 2024? Let’s dive in.
Set Reasonable Expectations
You don’t want to set yourself up for failure before you’ve even begun. This is why it’s important to set reasonable goals and expectations surrounding your debt. For example, it’s probably not reasonable to pay off a $200,000 mortgage in one year on a $100,000 annual salary.
Before you solidify your debt goals, analyze your situation. Make a list of your current debt, including auto loans, mortgages, personal loans, credit cards, and student loans. Then, look at your expected income for the year. How much can you reasonably allocate to your loans? It can help to set monthly goals throughout the year rather than one big annual goal.
Proper Expense Management: The Key to Success
Expense management is the underlying factor that drives success. If you have little control over what you are spending each month, it can be difficult, if not impossible, to reach your debt goals. This is where a budget comes into play. Take the time to develop a monthly budget that allocates where your money is going. Then, revisit your budget throughout the month to track progress.
Proper expense management also involves changing your thinking surrounding money. Before you make a purchase, ask yourself why you want the item. Is it the latest trending product that you don’t really need? How about an impulse buy that suppresses an underlying spending issue? Pinpointing the factors driving your purchases is critical to changing your thinking surrounding debt and money management.
Maximizing Your Fund Utilization
Fund utilization is another important factor when it comes to beating the statistics surrounding New Year’s resolution success. Is your money being effectively utilized? For one, are there ways that you can cut costs? Could you refinance your mortgage and lower your monthly payment with Texas Republic Bank? This can generate extra cash flow that can be allocated to your debt.
Additionally, look at which debt you are paying down first to ensure it makes sense. Should you be paying down the credit card with the lowest balance or start working toward the debt that’s accruing the highest interest rate? You work hard for your money. Be sure your money is also working hard for you with proper utilization.
Are you ready to get started on your debt goals? Refinancing doesn’t have to wait until the new year. Contact one of our lenders at Texas Republic Bank to discuss your refinancing options. We want to help you reach your debt goals going into 2024!
Download: Dreaming of a Debt Free 2024