Are you horrible with money? Is debt piling up? Do your long-term financial goals seem impossible? Well, we’re here to help with basic tips and ideas to improve your finances and secure a brighter future. You must know this journey is not easy and will require new and strict habits and a lot of hard work, which will only benefit you, your family and assets. So, if you’re ready, let’s get started!
Organize your finances and budget accordingly
Organizing your finances is the first step to ensure financial security. You have to keep track of all credit cards, bank accounts, personal loans, brokerage accounts, mortgages, car loans, and retirement accounts. When you have that down, you can budget accordingly which can be done a few ways like utilizing computer software or hire a financial advisor. You’ll be able to figure out what you can afford, make realistic payments, understand where your money is going, set appropriate spending targets and plan for a prosperous financial future.
Cut your spending
With everything accounted for and a budget in place, you’ll know where you spend the most, be able to control your money and trim expenses where you can. Even a small change can save a lot of money and will create new habits that don’t abuse your bank account. This may be difficult for some because it takes more discipline to separate what you need from what you want. A great way to keep yourself on course is to remind yourself of the long-term goals you want to achieve.
Pay off debts ASAP
Paying the monthly minimum is not an effective way to pay down debt. It’s actually more costly due to high-interest rates and service fees and your credit score may suffer as well. With a budget in place and spending controlled, use all funds you freed up and put it towards your debt. You want to pay it off as soon as you can. Try to keep your total monthly debt payments the same, even as you pay off creditors. This way, you pay off the debt quickly and save a large amount of money in reduced interest costs.
Many people trip up in this department and either get in trouble with the IRS or miss out on a lot of tax breaks. Visit irs.gov and learn as much as you can and find the answers to any questions that you might have. You can certainly hire an accountant, utilize online services and do further research with helpful avenues.
Maintain and build your credit score
Nowadays, it’s easier than ever to find out what your credit score is and what’s affecting it. It’s important to know and keep track of it because a low score means you will not be eligible for the best financing options. Pay all bills and credit accounts on time because they may be sold to a collection agency, which will seriously hurt your credit. Keep your credit utilization low and don’t let anything exceed 30% of your credit limit. Avoid opening too many new accounts because the process lowers your average account age, which makes up part of your credit score. Furthermore, keep accounts open and active as long as possible. If you don’t have any credit history, applying for a secured credit card is a good way to start.
Plan for the unexpected
The best piece of advice we can give for any occasion is a plan for the unexpected. We can’t predict the future or avoid the effects of a bad situation like weather or a leak. So, try to save as much money as you can and choose the best insurance policies to deal with unemployment, accidents, medical issues, repairs, and natural disasters. If you’re lucky enough and nothing major happens, you’ll have extra money to pay debts, put towards home improvements or consider the next piece of advice to open up more doors and possibilities.
Put your money to work
When you have your finances in order and feel comfortable to take on some risk, consider investing available funds. There are many investment opportunities in today’s marketplace like mutual funds, retirement accounts, stocks, real estate, and crowdfunding. The more you know the better and don’t be afraid to hire a consultant or stockbroker. You certainly don’t want to throw money around and jeopardize your financial security.
Handling finances can be intimidating and seem like an impossible task; more so for those stuck in debt. The steps above will get everyone on the right path to financial freedom but that can only be achieved with persistence and realistic goals set in place. We here at South Coast Property Management, Inc. want everyone to succeed with their monetary plans and will definitely assist those who need it.