Given the situation in our current world climate, many are thinking more about how to make their financial situation more secure. Maybe you’re swimming in debt or just nervous you won’t be able to make your next house payment — either way, you need a plan to turn your finances around. Our advice is to start with some small actionable steps like the ones listed below. Take your time and don’t get discouraged. Small progress is still progress.
Build a Budget
It’s hard to identify poor financial patterns until you have the actual numbers staring back at you. So, start with an itemized budget. Record exactly where your income and expenditures have been going these past few months. If you determine you’re spending more than you bring in, it’s time to get serious about cutting back. Setting up a budget is one of the most powerful tools you can utilize to gain control of your finances. A budget will help you improve your short-term spending. It can also help you to put a plan in place to reach your future money goals. Don’t forget that an essential part of putting a budget in place is to choose how you’ll implement it. There are various methods, such as:
- The envelope budgeting system
- Mobile apps that sync to your checking and savings account in real-time
- Spreadsheets you can update daily or weekly to keep yourself on track
It’s one thing to save money by not spending it, but to truly alter your financial status, you also need to be contributing money toward your savings regularly. Even if you’re only saving a few extra dollars a month, small amounts can still add up over time. First, determine how often you’ll be able to put money away in savings. This will look different for everyone depending on their income, financial debts, goals, etc. Once you’ve determined how often and how much you’ll be able to put away, look for an interest-bearing account that you can direct your savings to.
Pay Off Debt
Living with a lot of debt is stressful, not to mention a massive obstacle to gaining financial stability. The first step to free up your money is to implement a plan to wipe out your current debt. One of the fastest ways to make a large amount of traction on reducing your debt is to get rid of any high-interest credit cards. Instead, look for credit card options like USAA’s that offer low annual percentage rates (APR) in addition to perks like cashback and low or no annual fees. Keep in mind, your credit cards, even low APR ones, need to be used responsibly to be the most beneficial.
Learn From The Experts
It’s too bad most schools don’t make students take a class on how to plan for their financial futures. We’d probably all be in better shape if they did. But just because you might be past school age doesn’t mean you can’t become a student in the financial realm. Seek out a trusted adviser such as a financial planner who can help you set-up a more long-term strategy to build wealth or even just a good credit score. Managing your money takes time to understand and improve upon, so invest in the people and products you need to stop worrying about your finances once and for all.
Photo is from iStock
Guest Author Bio
Natalie is a writing enthusiast with a deep interest in topics related to financial institutions. Spending a good amount of time researching around the same, whenever possible, I also likes sharing the useful information with people who may find it helpful.