If poor money management is preventing you from achieving personal goals, you can make changes that will take you in the right direction. There are no shortcuts. It takes dedication and drive. If you’re ready to enjoy a better quality of life, the time is now to take control of your finances.
Debt Overload
Your debt is piling up and consuming much of your expendable cash. Thankfully, there are ways to reduce it. If the majority of the debt is credit cards, you can apply for one that allows you to transfer the balance from existing cards, interest-free. If you don’t qualify for a new card, you can consolidate the credit card debt through companies like Old Dominion Associates. This will free up money that you can apply to savings.
Using a Household Budget
Many people dismiss the thought of a budget because they think it will put restrictions on their life, preventing them from enjoyment. This is not true. In fact, the opposite happens. When you stick to a budget, you track all your expenses. A new awareness of where your money goes allows you to focus and cut costs.
Set Financial Goals
Perhaps you want to buy a home for yourself and your family or you need a new car. These are things achievable when you manage money wisely. Use your budget to factor in money to work towards achieving your goals. For example, you need $20,000.00 as a down payment for a home. You want to buy within 2 years. Break down the number of months to come up with the money you need to save.
Cutting Expenses
There are many ways to reduce overhead costs and daily expenses. Cable television is something you want, not something you need. In order to achieve your goals, you can switch to a plan that costs less for the short term. Conserving energy will help you lower utility bills without compromising your lifestyle. Turn off lights when leaving a room, turn off the water when washing up, and using appliances during non-peak hours are a few examples that will save money.
Plan for Retirement
Any budget needs to allocate funds for your retirement. When you’re younger, it’s the best time to build wealth for the future. Social security will supplement your retirement at best. Many companies include a 401k as part of their benefits package and most match your contribution. Take advantage of this opportunity. If you are self-employed, you can acquire a 401k on your own. One benefit of a 401k is that you can use a percentage once fully vested. This can help you secure the funds for a home or a major repair. The best part is you’re borrowing from yourself and the repayment comes with interest.
Eliminate Frivolous Spending
Wasting money will take away funds from bills, vacations, and retirement. A budget will keep you aware of the money that’s yours and the money needed for other purposes. Instead of spending hundreds monthly on takeout, cut it back to twice a month. If you want something, a big-ticket item, like a new 70-inch 4k television, save up for it. You won’t borrow bill money and you’ll pay only the original price.
Avoid Using Credit Cards
Relying on credit cards for daily purchases is a sure way to remain in debt. Unless you have money in the bank and you want to earn perks, avoid using credit cards. A better method is to live within your means using cash. Give yourself a weekly allowance and when the money runs out, so do your purchases. This will help reduce credit card balances and teach you how to budget your money.
With 2021 on the horizon, it’s a great time to put the focus on smart money management. Creating a budget, reducing spending, and putting away money for tomorrow, will put you on track to make this year prosperous.