WASHINGTON – While many people will make a resolution to slim down in 2014, others may want to fatten up their wallets. U.S. News & World Report spoke with David Jones, president of the Association of Independent Consumer Credit Counseling Agencies, about ways to save money.
“People have been sobered by this economic situation and have changed their lives,” Jones said to U.S. News.
Here are some of Jones’ tips to save money in 2014:
- Evaluate your spending. Look at every expense you have to see where you are spending money — that includes food, entertainment, cable, cellphone and more. See where you can cut spending, for example, packing your lunch instead of going out to eat.
- Fund your 401(k) plan. Starting a habit of funding your 401(k) is a great New Year’s resolution. Jones suggests maxing out your contributions to your 401(k).
- Start an emergency fund. Accumulate six months of take-home pay in case of some sort of emergency. While it can be difficult if you live paycheck to paycheck, it is vital to have some money stored away in case you lose your job or have a medical emergency. One way to do that is to keep the money in a savings account.
- Live beneath your means. This is great advice for every person, every year. Even if you can afford a Cadillac, there can be more long-term benefits if you buy a lower-priced car.
- Consolidate credit-card debt. Debt consolidation can lower interest rates. Also, if you are having problems paying your credit card, seek counseling to change the way you’re earning and spending.
- Pay back credit you obtain at 0 percent interest. Credit card companies count on some borrowers to not pay the credit card balance before the interest rate jumps from 0 percent to 15 percent or more, so make sure to pay it back before the last day of the offer.
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