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The commencement of a new year is the perfect opportunity to refocus on goals and create new resolutions. Many people use the beginning of a new year as a chance to increase their personal focus on fitness or to lose weight. However, being financially healthy is just as important. Therefore, we recommend you take the following financial resolutions into consideration to make 2020 the best financial year yet:

Create a Budget

If you “fail to plan, you plan to fail”. This means approaching your financial year without a monthly or weekly budget is a plan to fail financially. To create a budget, gather all your expenses and monthly bills. Determine what you have coming in income wise and then what you have to pay monthly. Then, budget how to get out of debt and save. This is a vital step towards financial freedom in 2020.

Build an Emergency Fund

To ensure you don’t get yourself into deeper debt, you must have an emergency fund. Many financial experts recommend having at least $1,000 in an account. This should be an account you can easily access for valid emergencies. Applicable emergencies could include paying for an appliance or car repair or a medical expense. Something that simply must be handled. Once you get your $1,000 saved up, work to pay off debt and build additional savings. Ideally, you want to reach the goal of having three to six months of living expenses at the ready should you lose a job or face some other unexpected financial calamity. If you are currently without any savings at all, don’t feel bad. According to the Federal Reserve Board, some 39% of Americans can’t even cover an unexpected $400 hit. Their savings won’t even cover that, so you aren’t alone. Of course, aiming to have even more than the average in your savings is a wise goal.

Pay Off Debt

Let the new year be the impetus you need to thoroughly attack your consumer debt. Most Americans have a mortgage and car loan debt. This debt isn’t great, but it isn’t as detrimental as credit card or consumer debt. The incredibly high credit card rates mean this debt will continue to grow expediently, especially if you are only making minimum payments and continue to charge items on your credit card. To get out from under credit card debt, find extra money in your budget by cutting out unnecessary expenses temporarily. If you can’t manage to find an extra penny among your current income, then get another job, temporarily, until your credit card debt is paid off. Of course, in order to make any sort of headway, you must stop purchasing items with the credit card. Otherwise, anything you pay off is quickly replaced with what you charged, and the cycle goes on and on.

Make 2020 the year you get on the right financial path. Use the tips listed above to start out on the right foot. Remember, if you fail, start up again the next pay period and stay committed. Don’t let one setback lead to a complete failure. We all tend to fall back into old habits. They are not quickly broken, so be patient with yourself. Above all, remain committed to creating financial freedom, no matter what happens throughout the year. By 2021, you will be so glad you did.