Not everyone is good with their finances. In fact, over 70 percent of the workforce lives paycheck to paycheck, just getting by, literally by the seat of their pants. In many cases, income is not the problem, it’s their poor spending habits. If you want to break free of the vicious cycle there’s no better time than now to get your finances in order.
Change Your Spending Habits
In order to get your finances in order and in good standing, you must put an end to unnecessary purchases. There’s a difference between needs and wants. You need gas in the tank to get to work, whereas what you want a hot Ruben for lunch at the deli. Drastically reducing these types of purchases will free up a large sum of money each month. Instead of eating lunch out, buying coffee on the way to work and eating out two times a week, do it once a month as a reward. These added expenses can sap your account and make it impossible to pay your bills on time. As a result, you may need to borrow money. Unfortunately, traditional banks only lend to consumers with good credit. However, there are other lenders willing to provide installment loans to those with poor credit.
Stop Adding Debt to Credit Cards
Credit cards only work for you if you use them correctly. There are cards that offer perks such as free airline miles, cash-back on purchases and discounts for the amount you spend. However, if you continue to accumulate debt and max out your cards you’ll defeat their purpose.
Instead, you’ll end up paying interest on everything you buy. This means it can end up costing you two or even three times more than the original price. Unless you’re able to pay the bill in full each month, don’t use them.
Using Cash
Learning to live on cash is an eye-opener as to how much things actually cost. Give yourself a weekly allowance and stick to it. When you run out of money, you have to wait until the next week to get more. After just a few weeks you’ll start to appreciate your money and begin to change your spending habits.
A Household Budget
A household budget is an essential component that lets you take charge of your finances. It gives you a clear, undisputable look at where you spend your money. By doing this, it also helps you create short-term and long-term goals steering you and your spouse in the right direction to achieve financial success. It also brings awareness to due dates and how much money you need to bring in to live life comfortably.
Earning Extra Money
You may find, after creating a budget, that your money is not yours. It’s tied up in household expenses and extended credit obligations. The good news is that now you know you need to make more money until you reduce some of your debt. Thankfully, there are many part-time jobs available or ways to turn your time into money, whether it is something low effort and quick like driving for Uber, or looking into a more involved second job like working in real estate..
Emergency Fund
An emergency fund is something that every person needs to be tucked away for those unexpected expenses. Cars and homes need repairs and having the money on hand will prevent you from using your bill money to cover the bill. Start small, taking say $20.00 each week and then as you reduce your debt or increase your income you can allocate more.
Getting your finances in order will improve your quality of life and allow you to enjoy each day stress-free.