New Year, New Habits -- 5 Ways to Improve Your Finances in 2013

/ BY / Personal Finance

Most people ring in the New Year with resolutions and goals to work towards throughout the year. Maybe you want to raise your credit score so you can get a lower interest rate. Or, perhaps you'd like to learn how to better manage your credit.

If improving your financial situation is on your list of things to do this year, these five tips will show you how to create new habits that can improve all aspects of your finances.

1. Use your credit card to your advantage.

If you regularly use a credit card, make sure you’re using one that gives back. There are dozens of cards that reward users through airline miles, cash back, and discounts of products and services you regularly use. If you pay off the balance of your card each month, you’re earning freebies and discounts without having to pay interest on your card.

If your card doesn’t offer any rewards, now is a good time to consider shopping around for one that does. Look for one that also has balance transfer benefits, like no interest for a certain period of time. To get an idea of the different rewards cards available, visit

2. Make—and use—a budget.

A budget is a must. It puts you in control of your finances by helping you see how much you’re spending every month and what you’re spending it on. If you don’t have a budget, make one. Before you do, think of specific goals you’d like to accomplish, such as paying down debt or saving for retirement. As you make your budget, look for ways you can cut spending in order to accomplish your goals.

Of course, a budget won’t help you if you don’t stick with it. Refer to your budget often and do whatever it takes to help you follow it, whether it’s signing up for automatic payments or moving to a cash-only system of spending.

3. Start saving.

Spending is always more fun than saving, but a sparse or nonexistent savings account can be financially devastating in an emergency. Make it a goal to start saving more money each month. Put it in a separate account, preferably one that is not tied to your checking so you’re not tempted to use it.

If you are more of a spendthrift, consider having a certain amount automatically sent to your savings account each pay period. This way, you won’t be tempted to spend it.

4. Clean up your credit.

A poor credit score can hold you back in a lot of ways. It means higher interest rates, difficulty qualifying for loans, and can reflect poorly on you to a potential employer. Now is a great time to start improving your credit. You can order one free report a year from

Once you get your report, look over it to see where you can improve. If you have past due accounts, bring them current. If your credit is maxed out, work to pay it off. You should also look for errors on your report, which can be hurting your score, and dispute them with the credit reporting agencies.

5. Tackle your debt.

In many cases, debt is necessary. Without going in to debt, most of us wouldn’t have homes or even cars. But too much debt lowers your credit score and eats up your hard-earned money on interest and fees. Make a debt reduction plan that includes not opening up any new lines of credit and not adding to your balances.

The New Year is the perfect time to develop new habits that allow you to improve your finances.

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Please note your financial situation is unique and our tips & advice presented here may not be appropriate for your situation. recommends that you seek different advice & opinions from your own accountant or financial adviser who understands your individual circumstances before making any important decisions or implementing any financial strategy.