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The new year is just around the corner, and you have a chance to start fresh with many facets of your life including your finances. Start off right by getting your finances in order an begin making a plan for how you are going to pay your bills, pay off your debts and save money for emergencies. It’s also time to make a new budget, especially if you are considering getting a new loan, like a car loan. The time to plan starts now, and here are a few tips to keep in mind when planning for your 2012 finances.
Set a Budget
Congress may not be able to set a budget correctly, but it is essential that you do. Tally up all of your monthly expenses into several categories. Suggested categories can include the following:
Fixed Expenses: These include all bills that you have on a permanent basis like your mortgage, electric bill, phone and cable, auto insurance, your car loan and anything else that is fixed or doesn’t fluctuate too much during the year.
**If you have a fixed expense that fluctuates from month to month, figure out what your average expense will be and then save any excess money for the times where you will need to pay more.
Debts: Include some of your budget money to pay off your existing debts. Have enough money to make your minimum payments and then tackle the balances that have the higher interest rates first with the rest of your budgeted money. Never make the minimum payment only as this will take too long and cost too much.
Savings: Some of your budget money should be set aside for a savings account so that you will always have some money for the hard times. Try setting aside as much as you can without sacrificing money in the other categories.
Miscellaneous Expenses: Your budget can include some money for you to spend at your leisure. Make this expense category one that you won’t feel bad about if it’s all spent, but be sure not to spend more than you set aside. This expense should be the last item category in your budget and the first item you cut in times of financial need.
Loans
Before getting a new loan, like a personal loan or car loan, make sure the you have plenty of room within your budget for the payments. You will also need to consider any increases for the insurance premiums for your new vehicle. Pay your loan on time so you can stay on top of your finances and keep your credit score in good standing. Always try to get a loan where you can make the lowest monthly payments possible, but then pay off as much per month as you can. In this way, you will get out of debt faster, but you can always fall back on the low monthly payment in case you get in a bind for a month or two. Despite any financial trouble you’ve had in the past, you can start the 2012 year off on the right foot. The important thing to remember is to set a budget and stick to it as much as possible. Cut your budget from the bottom up, meaning, cut out the fun money so that you can keep paying your bills and stay on top of your credit rating. Keeping on top of your finances is easy, and as long as you have the discipline to do it, you can live within your means on any salary.
About the Author: Kathleen Hubert is a blogger who writes on a variety of different sites. Check out more of her work at car loans
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