Californians have plenty of reasons to have a sunny demeanor, and not just because of the weather. California offers more paid medical leave than most other states, and in many California cities, it is easy to get from home to work on your bicycle or public transportation. Despite this, there is no escaping the fact that California is one of the most expensive states to do just about anything. If you try to retire with a million dollars in California, your retirement savings will be long gone by the time you reach your 80th birthday. 

Getting divorced in California costs a fortune, even if you reach a mediated settlement and avoid going to trial, where the judge will apply the community property laws and give your ex-spouse half of the marital property. When you’re young and broke, though, this all sounds like a thought experiment. You can’t afford to take a day off from work, much less retire, and you can’t afford to go on a date, much less get divorced. Despite this, it’s a new year, and you are one year closer to middle age, so you are determined to straighten out your finances this year as best you can. If you are having a quarter-life crisis because you have more than a thousand dollars of debt for each year you have been on the Earth, contact an Oakland lawsuits, collections, and creditor harassment lawyer.

Paying Down Debts

You know it was a good year if your debt balances are lower at Christmas than they were at the beginning of the year. If you are employed, then paying down your debts as much as you can throughout the year is a manageable New Year’s resolution, even if you are under no illusions about paying them all the way down to zero in one year. If you pay just a little bit more than the minimum payment on one of your debts each month, it will get substantially smaller over the course of the year. 

Economists advise you to follow the avalanche method, where you focus your efforts on the debt with the highest interest rate because this will save you money over time. The best method for staying motivated is the snowball method, though. In this method, you start by focusing your efforts on the debt with the lowest balance; this way, you can see your progress as the debt balance gets lower throughout the year or even disappears completely so you can tackle the next smallest debt.

Getting Started on Saving

Most Americans under age 40 live paycheck to paycheck and don’t have much money to save, but every little bit helps. Enroll in a program where, every time you make a debit card purchase, your card rounds up the amount to the next dollar and deposits the extra change into savings. Once you pay off one debt with the snowball method, start making a small deposit into savings each month, such as half the amount of the monthly payment on your debt with the lowest monthly payment.

Contact the Law Office of Melanie Tavare About Starting Small

A debt relief lawyer can help you get your finances in order so that you can pursue your savings and debt repayment goals. Contact the Law Office of Melanie Tavare in Oakland, California, or call (510)255-4646 for a free case evaluation.