GREENVILLE, N.C. (WNCT) — The Better Business Bureau of Eastern North Carolina is offering some tips to help people stick to a New Year’s Resolution to be financially healthy in 2021.
“Household debt has grown exponentially this year and it can seem like a daunting task to even look at total,” said Mallory Wojciechowski, president and CEO of BBB. “Taking small steps can make a big difference and it is important that consumers start taking those steps now.”
BBB reports household debt has grown rapidly in 2020. Many people have lost their jobs and have accumulated debt due to the pandemic. However, Alyssa Parker, Director of Communications for the BBB, said taking small steps now can make a big difference.
Parker recommends taking a closer look at your credit cards and not wasting money on unethical businesses or scams.
“Financial health is possible if you take the time to realize there are some quick easy tools or methods you can employ to make sure you’re doing the best you can,” Parker said. “It’s the perfect time to get that started. So making sure you’re taking a look at your credit cards, understanding when you can put money on it, seeing if there’s another credit card with a lower interest rate you can transfer to.”
Below are some additional tips the BBB says you can do to help meet your financial resolutions in 2021:
Take a closer look at your credit cards. Credit cards are known for their high interest rates, and this can waste a lot of money over time. See if you can use a balance transfer offer to switch to a card with a lower rate. Consumers nationwide filed more than 8,933 complaints against credit card companies in 2019. Make sure to read the terms and contract very carefully – there may be big penalties if you miss a payment. If you have multiple cards, decide which debt-paying strategy is best for you. Some experts recommend paying off cards with the highest interest rates first, but others recommend paying off cards with the smallest balances first. Put the $5 you would have spent on a morning coffee towards your debt instead.
Don’t waste money on unethical businesses or scams. When making a purchase or choosing a business, always check with BBB. Making careful decisions now can save you time, money, and headaches later.
Take advantage of free tools. There are many online tools that can help you manage and reduce your debt. A great place to start is the BBB Financial Building Blocks website, which helps consumers evaluate their finances, learn how to stay debt-free, and protect themselves from scams and illegal collection calls. Additionally, you can use the free and easy-to-use debt solution tool to find options for managing your debt.
Start Using More Cash (if possible). Although there has been a large effort to use plastic payment cards since it is more efficient and cash can be dirty, using the green paper may actually lead you to spend less money. Consumers are less likely to realize the impact of them spending more money when they use a plastic card.
Start budgeting. Creating a written budget and tracking your spending is one of the best ways to save money and stop spending more than you earn. First, figure out how much debt you have; you need an accurate picture before you can figure out your budget. Note the difference between fixed expenses, needs and wants. If you have debt, include repayment goals in your budget. If you can, try to factor in retirement and emergency savings as well. Save money by giving up your morning coffee and cooking at home instead of getting takeout. Factor in any alternate income that you can think of, like selling unused items or part-time work in the gig economy.