No matter how much money you are making, it can be very easy to let spending get out of hand if you do not have a financial plan in place.
Here are some tips on stabilizing your finances that you can use no matter which income bracket you are in.
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You’ve probably heard this bit of advice plenty of times now, but it cannot be overstated. You absolutely need a budget if you expect to be on solid financial ground.
Keep in mind, the budget does not have to be anything complicated. As long as you know how much money is coming in and how much money is going out, you are on the right path. This undated financial planner from Amazon will help you keep track of expenses to take control of your money.
Your Savings Should Be a Bill
By this statement, we mean that your savings should be deposited every month without question, just as you would pay a bill when it comes due.
While a lot of advice says to save at least six months of living expenses to be financially secure, don’t stress about it too much. Saving what you reasonably can put aside will still provide you a base to work with and give you a better sense of security.
If you are like most people, you have student loans from multiple lenders that have varying interest rates and terms. This can be confusing and stressful to keep track of.
Consider taking out a new loan to consolidate all of those outstanding obligations into one low monthly payment and take advantage of a rate reduction overall. You’ll save both money and your sanity at the same time.
Remember Your Due Dates
If you are consistently missing the due dates of your bills, then you are paying late fees, which also means you are throwing away hard-earned money.
Arrange to have your bills automatically taken from your checking account so that you never miss a due date. If automatic payments are not an option for a particular bill, set the alarm on your phone as a reminder to pay. There are many phone apps that help you keep track of your bill payments.
Check Your Credit Report Regularly
Even if you make all of your payments on time, it is still highly advisable to keep an eye on your credit report. This is because errors can occur, which, if left unreported, can cause havoc if you need to apply for a loan or make a major purchase using some form of credit.
Make sure you report any errors to the credit bureaus as soon as you spot them.
Make Sure to Pay Debt as Quickly as Possible
Debt is the number one cause of being financially weak. If you have outstanding debt, make sure to pay it off as quickly as possible, even if that means temporarily forgoing items you otherwise spend money on.
The longer the loans are left unpaid in full, the more interest you are paying. Even a modest interest rate can add up over time, resulting in unnecessary money being paid out.
Some may tell you to avoid credit cards, but cards are not necessarily bad. It’s just that many people rack up charges and do pay them off promptly.
Getting a credit card is all about being consistent in paying them. If you pay the balance in full at the end of the month, you can actually come out ahead via cashback on purchases, rewards points, and other incentives that card issuers offer.
These were some tips for stabilizing your finances and getting your spending on track so you can spend consciously. What are your tips on this? Let us know in the comments.