BBB column: Decide to make the right financial choice in 2023

Ahead of the new year, and many are thinking about their finances. The effects of the pandemic, from adjusting retirement investments and timing to figuring out how and where to pay off debt, holdings or rents, continue to affect many households and how they see their future.

“Developing good financial habits, including budgeting and budgeting, can be one of the most important decisions you can make to secure your family’s future,” said Mechele Agbayani Mills, President and CEO of BBB Central East Texas. “This is not true. It’s not easy, but it’s worth it.”

The BBB offers the following tips to help you get on the right path to a better financial future:

Calculate your income. You won’t be able to make a proper financial decision if you don’t know what your income is. Calculate your monthly net (after taxes) income so you can set a clear budget based on what you bring home.

Set a budget. Once you have an idea of ​​what you are spending money on, you can set a realistic budget. There are free online tools to help you, so there is no need to spend a lot of money on budgeting software. However, be careful of scams and don’t share personally identifiable information unless you’ve verified the legitimacy of the site. Clearpoint Credit Counseling Solutions, a BBB accredited business and national partner, offers a budget calculator to help you budget.

Control your expenses. Whether you prefer an app, computer software, or a notepad to keep track of your spending, keeping track of which categories you spend money on (utilities, entertainment, etc.) is critical, allowing you to see where you are. actually spend your money, not where you think it is being spent.

Pay the debt off. One method is to pay off the loan with the highest interest rate first (the “ladder method”). Another way is to pay off the smallest balance first to feel a greater sense of accomplishment (the “snowball method”). Use whichever method works best for you. What matters is that you do it.

Be active with your finances. Don’t waste money on unethical businesses or scams. When making a purchase or selecting a business, please consult BBB first. Making smart decisions now can save you time, money, and headaches down the road. Remember, great business exists. Always look for a BBB seal; this is a sign of a better business. Start with companies you can trust by going to bbb.org and check the BBB Scam Tracker regularly to see what scams are happening in your area.

Construction and emergency fund. Ideally, an emergency fund could cover things like car or home repairs, unexpected medical expenses, or layoffs. Financial experts suggest creating a reserve fund for living expenses from three to six months.

Keep track of your credit score. Credit scores are used by lenders to decide whether to offer you a loan and what the terms (interest or down payment) will be. Your credit score is a decision-making tool that lenders use to help them anticipate how likely you are to pay off your loan on time. Landlords also use your credit score when making decisions.

For more information

See the BBB New Year’s Guide for tips on how to start the year right. To learn more about scams, go to BBB.org/ScamTips. To learn more about how to avoid scams, visit BBB.org/AvoidScams. If you are a victim of this scam, please help others avoid the same problem by reporting your experience on BBB.org/ScamTracker. Stay up to date with the latest scam activity by subscribing to BBB Scam Alerts emails.

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