The beauty of a New Year is that it starts with a clean slate. I hate to pull out the “b” word, but now’s the perfect time to evaluate your budget and get your finances shaped up for 2012. First order of business—take inventory.
- Know your credit score. A good credit score can save you tens of thousands of dollars over your lifetime. AnnualCreditReport.com is the only truly free credit reporting website. Check your report regularly (you get up to three free credit reports a year) and dispute any errors.
- Evaluate your credit card terms. High interest rates? Call your credit card companies and ask if they’ll lower them. If they say no, shop for lower-interest credit cards with no or low balance transfer fees.
- Track your spending. For one week, write down everything you buy, even the small stuff. This will help you identify places where you can trim expenses.
- Calculate your debt. If you went over budget during the holidays, your credit card bills may shock you. That’s okay—just figure out how to make bigger payments. Skipping your daily latte may help you pay that balance off faster.
- Be smart about credit card rewards programs. They can work to your advantage with air miles, money for college or even cash back. But, if you don’t pay off your balance each month, interest charges will negate the value of rewards.
Now that you know where you are, the next step is to plan where you’re headed. Check back tomorrow—we’ll give you some ideas on how to save more money in 2012.
The article above was written by our newest contributor – Jeanette Pavini – an Emmy award-winning consumer reporter and personal finance columnist for The Wall Street Journal Digital Network.