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6 Tips to Reduce Debt in the New Year

According to University of Scranton research, only 8 percent of people keep their New Year’s Resolution for the year. For instance, how many times have you vowed to go to the gym 5 days a week, only to find yourself going 5 days in a year?

In 2018, set a more realistic goal that will help you accomplish more in the future: Save more money while lowering your debt! After the holidays, many people tighten their purse strings for a short time before falling into the same bad habits. We have 6 tips to help you maintain your savings goal.

Start with An Objective

Objectives are the specific, measurable steps to achieve a goal. For instance, the overall goal is to reduce debt and your objective may be to lower it by 5%, 10% or 20%. Determine what is reasonable for your financial situation, so you won’t be overwhelmed or easily discouraged.

Don’t Go At It Alone

Whether you decide to team up with friends, siblings or coworkers, drawing inspiration and learning from others can help you successfully meet your own goals. It is also easier to save money when your social circles agree they could all benefit from going out less often.

On the other hand, make sure you and your spouse are on the same page about shared finances. Discuss your financial plan on a regular basis and strive to meet goals together.

Analyze Interest Rates

Which credit cards and loans have the highest balances and interest rates? Although daunting, these are the debts you should start paying first. For many, this will include student and car loans, as well as primary cards. Once you get these balances down to manageable amounts, you can start adding other debts to your payoff list.

Create a Vision Board

You may be excited about your New Year’s Resolution for the first few weeks of 2018, but then lose sight of your goals. Life gets in the way and, before you know it, you’re back to ordering takeout and swiping your card too often. A vision board – a display of images that help bring goals to life – can help you stay on track and maintain focus on your end goal.

Protect Your Progress

After whittling down your debt, the last thing you want is for someone to reverse your progress. However, cases of identity theft increase every year and scammers are becoming savvier. One of the best steps you can take is two-step verification on all accounts: A strong password combined with your fingerprint can make it harder for thieves to crack the code.

Remember to Save!

Lastly, while you are conquering your debt, it’s also important to put money in different savings pools. This could include retirement and college funds, as well as your emergency fund. Also known as a rainy-day fund, financial experts recommend that you save 3 to 6 months of expenses in an emergency fund for the necessities.

Look forward to the financial year ahead with more tips from our Financial Learning Center. Contact Ion Bank today to learn more!

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