December 30, 2019
4 Tips to Help You Get Out of Debt in the New Year
As the new year rolls into frame, you’re probably thinking about all those financial goals you had for 2019. Maybe you crushed them or maybe you missed them, but there is no point in rehashing what you didn’t do. Here’s your chance to make a fresh new plan with, pardon the soon-to-be overused phrase, 2020 vision. Here are 4 tips that can help you get out of debt in the new year.
Zero Balance Budgeting
Zero balance budgeting is not a new concept, but many people are embracing it right now. It’s also known as the envelope system based on the idea that you would have actual envelopes in which to sort your different money categories. Today, you don’t need physical envelopes as there are specialized apps for zero balance budgeting or you can use your own spreadsheet.
What it means is that every dollar you earn has a job. Every time you get a paycheck, you divide it between the various categories you’ve established like:
- Mortgage or rent payments
- Consumer debt payments
Once you’ve sorted your money and given every dollar a job, there won’t be anything left over. This can help you visualize your money going into the separate envelopes and help you avoid over-spending. For example, if you want to go out to dinner with friends but your entertainment budget is running low, you would have to pull that money from somewhere else. Just knowing that can prevent you from taking money away from important expenses.
Pay More Than Your Minimum
Another important step for getting out of debt is to assess your credit cards and make a plan to pay them off. Look at the cards you have, the total balances, and the highest interest rates. Start by sending more than the minimum to the highest interest rate card every month. Send as much as your budget allows, but always more than the minimum.
Once that’s paid off, you can transition to the next card and so on. If you just keep paying the minimum, the interest will compound and you’ll find yourself in a much deeper hole. If you can pay as much as possible every time, you’ll start noticing actual progress.
Create an Emergency Fund
You’ve probably heard the advice that you should have at least 3 months’ salary stashed away for emergencies. But this doesn’t always feel doable, especially in Asheville where many people work in the gig economy or service industry with varying incomes.
Some experts suggest trying to start out with $1000, but when your income is variable this can feel daunting. If it’s too much, start saving a small amount every week or every month depending on when you get paid. Just $5 or $10 at a time will add up. Put this in its own envelope or account and don’t touch it.
Change Your Spending Priorities
Did you know that a simple change in your mindset can positively affect your relationship to money? It’s true, just thinking about your finances in a new way can help significantly. Consider how you normally phrase things. When someone asks you to join them in an activity or buy something they’re offering, your go-to phrase might be, “I can’t afford that right now.”
Consider this instead: “It’s not a priority for me right now.” The same is true when your gut instinct is to tell someone you’re “too busy” or “don’t have time.” It’s completely okay to prioritize things in your life based on what’s most important to you at this time. But reframing it in terms of a priority rather than something you simply can’t afford or don’t have time to do will change the way you approach things in your life.
Every time you consider what you’re about to spend, really take a step back and determine if it is a priority or if you can do something else instead.
Do you want to know more about wrangling out of debt and the healthy financial decisions that can help you buy a home in Asheville in 2020? Call Zachery Adam at GoPrime of West Asheville. Call us today.
20/20 Vision: Home Buying Resolutions for The New Year Is your vision 20/20? You knew we were going to say that, so soon after the first of the year. Yes, we have entered another decade and a new roaring 20s. While the financial market takes crazy twists and turns,...
What to do with gifts for down payment. Gift Funds and How to Verify Them Maybe you’re looking to buy a new home, but you’re hoping to get some help over the holidays from your family. You can definitely use these monetary gifts fore down payment of a new house. But...
Will Refinancing Actually Save You Money? Is refinancing right for your home? It sounds like an easy solution to so many problems, especially if you bought your home when interest rates were high. But refinancing is not a magic bullet and there are times when it may...
Make the Most of Leap Day It only happens once every four years. This year, 2020, we’re experiencing Leap Day. February will have 29 days this year rather than the typical 28. To make it even sweeter, this year’s Leap Day falls on a Saturday. So, in essence, you have...
Hipsterburbia: A Top Real Estate Trend to Watch in 2020 In a town like Asheville, the word “hipster” has almost been weaponized. It’s sometimes used to describe people outside of our own groups, those who may be faking it. But the term has taken on new meaning in real...
Random Acts of Kindness Week Starts Today As happens every year, Valentine’s Day is celebrated on February 14th. What was, at one time, a feast to honor a saint and martyr has become a day to share romantic love with the world. But there is more to Valentine’s Day...
How we can help you
Although labeled an independent mortgage lender, GoPrime Mortgage, Inc. is not a one-man operation. Zachery Adam and his Team has the support of a streamlined operation, with professionals who assist in every phase of the loan process. His team includes an appraisal vendor, loan processors, underwriters, closers and even the CEO or president if needed. When you choose to work with Zachery, you get the support of his team as well.
It’s important to Zack that he and his team are approachable and can provide assistance to home buyers who are often inundated with misinformation about the financial picture and mortgage options. In an automated culture reliant on digital communication, it’s time to put the human element back into these conversations. He could never be behind the scenes.
Let's Get Started
862 Haywood Road Asheville, NC 28806