This past year might not have turned out like you wanted it to. Perhaps you were hoping to get an amazing promotion that went to one of your co-workers instead. Or maybe you were hoping to save more money toward your dream trip but you ended up spending that money on too many bags of Flamin' Hot Cheetos. No matter what went wrong for you financially this year, the new year is an opportunity to turn everything around and start fresh — 2015 just might be the year you finally get your financial house in order.
Here are five tips to help you start the year off on the right financial footing.
Do a Student Loan Checkup
Many millennials are burdened by student loans, so it makes sense to ensure that you're getting the best terms possible for paying back the loans. Look into consolidating your federal loans and refinancing your private student loans. By refinancing your loans you can potentially get a lower interest rate and better repayment terms, saving you thousands of dollars in interest over the life of the loan and hundreds of dollars a month on your payments. I try not to pay more interest than I have to because doing so is basically like kissing your money and throwing it into the wind. You might also consider changing your payment plan in order to either accelerate your payments or space them out over more years.
Get a Financial Plan
Trying to accomplish your financial goals without a detailed financial plan is like getting on a plane without knowing your final destination. You'll probably end up somewhere, but it might not be where you wanted to go and it might take longer than you expect.
A financial plan involves you sitting down and figuring out what you want in life and how much money it will take to make that possible. While you can make a financial plan yourself, it might be easier down with a certified financial planner. I recommend finding a fee-only planner who doesn't earn a commission on any of the products he or she recommends. While financial advisers and financial professionals who earn commissions can also give you excellent advice, I like to be certain that advice I am provided is completely in my interest.
Build an Emergency Fund
If you haven't already saved up enough to cover your expenses for at least three to six months, then 2015 is the year to do it. Having cash reserves to cover you in case of an emergency will give you peace of mind and ensure you won't have to rely on credit cards if something goes wrong. If saving an emergency fund is impossible right now, consider at least opening a low-interest line of credit with your bank, or a low-interest-rate credit card to cover you in the event of an emergency. While cash reserves are best, having low-interest credit available is much better than resorting to high-interest credit cards if you need them in an emergency.