2018 is ending in just a few days. As an earning individual, you have made quite a lot of expenses and earned income all throughout the year. There are many who utilized credit cards and also took loans to satisfy their wishes. Since the year is about to end, we at Ruloans feel it is our duty to let you know about what is the right thing to do as this year ends.
We believe it is important to begin the New Year with a clean slate. Whether it is with pending work, fights or even finances, you need to clear them so that you can welcome the New Year with more opportunities. For this to happen, we have made a small list of necessary things you can do in order to begin this New Year with a clean slate.
Clear every bill or EMI:
Yes, times can be tough and you might have faced some trouble or emergency which did not allow you to pay off your credit card due and loan EMI. But with the year ending, you can change this scenario. Try paying off the entire due amount. We say this because not paying off your dues affects your credit score in a very harsh way. This will mean that in 2019 you might have a tough time getting a loan at good interest rates. Hence to ensure that such a scenario doesn’t take place, please pay off your dues before the year ends.
Plan your budget wisely:
Since this is the month of celebrations and gifting, we tend to overspend on our budget. But doing so affects us in the long run. Your income might not be able to handle all these expenses. Hence you might resort to swiping or withdrawing cash using your credit card more often. Withdrawing cash from your credit card would generate interest that can go above 30%*. Hence it is wise to plan and control your budget wisely.
Stay below 30% for credit utilization ratio:
One of the main rules that any person must follow while using a credit card is to stay within the credit utilization ratio of 30%. This means if you have a credit card limit of 1 lakh, do not spend more than 30,000. The main reason for this is that banks judge your credit hungry behavior. If you spend more on your credit card, it looks like you are very much dependent on credit than your income. This is not good from your point of view. Hence try your best to utilize your income and not be more dependent on credit card spending.
If you can try being debt free by the year end, it is a great feeling. Not many in our country can have that luxury of being debt free. Begin your new year with a good financial plan and secure your future. If you need any help, Ruloans is always available to serve your financial needs.