In the wake of excessive holiday spending, many of us vow to gain control of our finances this time of year. But where should you begin?
Champlain College’s, Jimena Huaco, financial educator and Assistant Director of Champlain’s Career Collaborative, weighs in with these practical and feasible tips to take control of your personal finances this year.
Make a budget…and stick to it.
How much money do you earn every month? How much do you spend? What debts do you need to pay? Which expenses are optional, and which ones are mandatory? Take some time to write it all out. I’ve seen, first hand, how eye-opening this process can be. Every Champlain College student is required to build a personal budget during their first year. Working with these students, I am always amazed by how empowering and insightful this is for them. And yet so many Americans do not have a household budget. Now is a great time to get started. You can start by following the simple 50/20/30 budget rule. By allocating 50% of our income towards fixed expenses, 30% towards variable expenses, and 20% towards savings, you’ll have a healthy budget that will help you reach your goals. It is a simple and incredibly powerful way to gain control of your financial situation.
By allocating 50% of our income towards fixed expenses, 30% towards variable expenses, and 20% towards savings, you’ll have a healthy budget that will help you reach your goals.
Set meaningful goals.
Take some time to think about what you want to accomplish financially, and what it means to you. Money is a very practical thing, of course, but there’s also an emotional element that can be very motivating. Maybe you are saving for something important—like a home, or education. Maybe you are trying to pay off a debt. Whatever it is, stop and think about what reaching this goal will mean to you. Write it down. What do you want to accomplish? How will you feel when you succeed? Use that feeling to fuel your motivation to stick to your budget, and to stay away from tempting impulses.
Take credit by the reins.
Responsible credit management sits at the core of financial wellness. Do you know your credit score? Do you know how much interest you are paying on your credit card each month? Do you know your current credit card balance? If not, it is time to bite the bullet and find out. What you don’t know, in this case, can certainly hurt you. Take your credit by the reins and get the answers you need to make smart decisions. At Champlain College, every second year student is required to undergo a personal credit review to learn more about where they stand, develop a personal credit action plan to address any issues, build credit, and improve their credit score. When it comes to credit, knowledge is power.
When it comes to credit, knowledge is power.
Resolutions play an important role in helping us identify our intentions. But it takes more than intention to make meaningful change. You need to take action. Budgeting, setting goals, and wrangling your credit are three powerful steps you can take to improve your financial future in 2020.
All Champlain students participate in a mandatory, four year personal financial education and career preparedness program called InSight. By the time they graduate, our students will have learned how to create and follow a budget, establish credit, manage debt, and invest their money.