In case you have been just about making ends meet, and have splashed out on credit cards last year, it might be a good idea to take a step back and find out how you can live more comfortably without building up even more debt. We all want to try and make the most out of our finances, but stretch too far at times, just to realize that we end up paying back more than we can afford. If you would like to look after your financial health better in the new year, you will find some tips to get started below.

Check Your Credit Score

The first step towards financial health should be checking your credit score. It is important that your financial profile is appealing to banks and credit card companies, so you can be offered lower rates and better terms. If you have not checked your credit rating recently, you should do it now, and look for areas of improvements. In case you had some late payments, you should make sure you make up for it by ensuring that all your repayments leave your account on time in the new year. If you need to adjust your payment dates to do that, get in touch with your bank, power, insurance, and lease companies, to make sure you always have enough money on your account to pay your bills.

Create a Budget

The next step should be creating a budget to make sure you can afford all your subscriptions and services. You can look back at your spendings in the past year, and find areas where you can cut back. For example, having your coffee at the local shop or work canteen in the morning can add up to hundreds of dollars each year. Likewise, driving to work and paying for gas and parking, instead of taking the train or carpooling can increase your living costs. Look for magazine and cable subscriptions you no longer use, so you can eliminate unnecessary expenses and free up money in your budget to pay back credit card debt or save up for your next vacation. You can find several free budgeting software and Excel spreadsheets on the internet that can help you with the task.

Create an Emergency Fund

If your car breaks down in the middle of the road and you don’t have the money to pay the insurance excess, you can face a difficulty. What if your furnace needs repairing in the middle of the winter? You might be hospitalized, and need to pay your health care costs. It is always a good idea to have an emergency fund that will help you out in these situations. Whenever you can, put some money in a separate account, even a savings bank account that allows you to access the funds quickly. This way, you will not have to take on short term payday loans that will cost you hundreds of dollars in interest, and jeopardize your monthly budget.

Adjust Your Lifestyle

When ending a year, you might want to ask yourself some serious questions. Can you really afford to live where you do? Are you able to sustain your lifestyle long term given that your income doesn’t change? If you would like to stay where you are and enjoy the same things, but your budget simply doesn’t add up, it might be time to implement some changes. You might like the location of your house, but have too many rooms. Create en suite rooms you can rent out on a daily or monthly basis, signing up for AirBNB or other services. You might also want to downsize and find a smaller property in the same area. If you are paying too much for parking near your home, you might want to find a new one that has off street parking. Whatever you like about your lifestyle, keep it, but make sure you are getting the best deal, so your money goes further.

Make a Spending Plan

You might have some big long term plans that you have been putting off for years. Is your kitchen or bathroom dated, or is your house ready for an overhaul? Create a plan for the new year of what you would like to get done. If you are due a bonus every quarter, budget accordingly, so you can plan your home improvements and vacations for the time when you can afford them without getting into a huge debt. Check out Payday Loans Net to find out more about financing your big investments and comparing interest rates and terms.  If you have shares that will pay you dividends, find out how much you are likely to receive, so you can plan your big spending accordingly. It is also a good idea to get your family members to give you a list of what they would like for their birthdays, ahead of the time, so you can make the purchases on time.

Have a Saving Goal

It is always a good idea to save money, even if the interest rates are low. You might have a special anniversary or birthday coming up. Start saving now, and you can have a great time without having to take out a long term loan. Save up for your vacations, your kids’ education and wedding, as well as other expenses that will occur in the distant future.

Cut Your Bills

When your bank decides whether or not to lend you money, they look at your income and expenditures, as well as your credit score. One of the most important factors of your budget is affordability. If you are spent out and have little or no money left over each month, your statements will tell your loan or credit card company that you are not likely to be able to afford the repayments. Comparing service prices, including home and life insurance, motor insurance, cable TV, electricity, gas, internet, and much more can help you free up money from your budget. By having some funds left over after paying your bills, you can secure a better rate on long term and short term loans, credit cards, and mortgages.

Consolidate Your Debt

If you built up debt in the past few years, and the fees and interest charges got out of control, it might be time to look at different consolidation loans. You can save hundreds of dollars every month by pooling all your credit together and having one monthly repayment that is easy to manage. Look at price comparison sites and make sure you read the small print of your existing agreements, to avoid paying cancellation fees.

Look for Ways of Increasing Your Income

In case you find it hard to meet your financial commitments, even after creating a budget and consolidating your existing accounts, it might be time to step up your game. You might need to sign up for overtime, work towards a promotion, or change your job to earn more money. This way, you can keep your current lifestyle, clear your debt, and stop worrying about your finances in the new year.

Whenever you near the end of the year, you need to look back and search for areas of improvement. Check your credit account balances, and try saving money where you can. Look at your lifestyle, and make sure that you can afford it. Compare your insurance prices and make sure you have a rainy day fund that gets you through the difficulties. This way, you can look after your financial health in the new year.