“Improving my finances” has to be one of the most common New Year’s resolutions year after year, and for a good reason! When you have a good understanding of how to manage your finances, you set yourself up for a more stable future.

However, according to a study in the Journal of Clinical Psychology, only 46% of people who make New Year’s resolutions actually keep them. That’s when we step in!

At Habitat, we know that having healthy finances is vital to open doors to opportunity. So, our Housing Counseling Program is here to help kick off the New Year with our top 10 tips to better manage your finances and achieve your New Year’s resolution!

1. Keep balances low on your credit cards. The closer your credit card balance gets to your high credit limit, the lower your credit score will be.

2. If you pay off a credit card balance, don’t close the account. Leave the account open – just don’t use it. Closing the account will hurt your credit more than helping it.

3. You can get a free copy of your credit report at www.annualcreditreport.com. Monitor your credit throughout the year for free. You are entitled to a free copy of your credit report from each of the three major credit reporting agencies (shown in the link) every 12 months. If you request your free copy from one credit reporting agency, then wait four months and request your free copy from another credit reporting agency. Rotate your requests every four months (Equifax, then TransUnion, then Experian, and then back to Equifax), and you can get a copy for free every four months.

4. Everyone should have an emergency fund to prepare for the unexpected. You never know when you might experience a major car repair, loss of a job, illness or injury, etc. You should have the equivalent of between three and six months of your take-home pay in an emergency savings account to protect you from going into debt or harming your credit.
Financial Security is Key !
5. Develop a household budget. This will help you determine how much you can save each month. Calculate all income (after tax income) you receive on a regular, monthly basis and then subtract monthly expenses from the total. Don’t forget to include periodic expenses (if you pay for your auto insurance every six months, for example. If you do, divide that amount by six and put it in your monthly budgeted expenses). If you don’t include the cash money spent each month, your budget will not accurately reflect how you’re spending money – you have to include it, too.

6. Identify ways to reduce expenses if your budget doesn’t balance or you’re trying to reach a specific financial goal (buying a car or a home, paying off credit cards, financing an education, etc.).

7. If you’re struggling to pay student loans...check out the various loan repayment options for federal student loans such as income-based repayment or loan forgiveness if you work in a public service position. Information is available at: www.studentaid.gov.

8. Set specific financial goals for yourself – whether it’s paying off debt, purchasing a car or a home, taking a vacation, etc. By putting money in a savings account each month, you can reach your goals and avoid costly debt. Your budget can help you determine how much you need to save each month and how long it will take you to reach the goal.

9. Pay yourself first. Once you have determined how much money you can save each month toward your financial goal, pay yourself first. If you wait until the end of the month, often that money is no longer there – but has been spent on other temptations.

10. If you need help, ASK! If you need help managing monthly expenses, want help putting together a budget to reach a goal, or need help understanding how to improve your credit, contact a non-profit Housing Counseling Agency. Habitat for Humanity East Bay/Silicon Valley is a HUD-certified Housing Counseling Agency. It’s free! 

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About the Author

Habitat for Humanity East Bay/Silicon Valley

As an independent affiliate of Habitat for Humanity International, Habitat East Bay/Silicon Valley believes in a world where everyone has a decent place to live. We create opportunities for families to transform their lives, gaining the strength, stability, and self-reliance they need to build a better future. Working together as a community, we build homes with affordable mortgages, repair and renovate existing homes, counsel first-time homebuyers, and revitalize neighborhoods in Alameda, Contra Costa, and Santa Clara counties. For more information, please call 866.450.4432.

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