Managing your personal finances can be difficult at times. Unexpected expenses and a higher cost of living can mean major headaches when bills are due.
Read on to learn our top personal finance tips to help you take the stress out of your personal finances.
1. Stop Using Credit Cards
The longer you use your credit cards, the longer you’ll stay in debt. Interest rates and late fees are toxic for your credit health.
Stop using your credit cards as soon as possible. Cut them up if need be. Making minimum payments can mean paying maximum interest. This vicious cycle will keep you in debt for decades.
Stop making excuses. Just stop using your plastic and carry cash instead.
2. Save $1,000… NOW
Saving $1,000 is the first step in getting out of debt according to money guru Dave Ramsey. Because people often use credit cards to cover emergency expenses, you’ll need to keep your alternative ready.
Having a small stash of money can mean the difference between relying on credit cards and financial independence. You’ll need to scrape and work to put together this stash if need be, but make it happen.
You’ll know you’ll have something to fall back on if something unexpected arises.
3. Work on Your Debts One at a Time
Once you’ve made your stash, it’s time to start looking at your debts. You’ll want to rank them from smallest to largest.
Now it’s time to get motivated. You’ll need to want to get debt free as much as you wanted everything you put on those lines of credit. It’s time to get serious!
Keep making minimum payments on your debts, but put aside $100 from your monthly income. You’ll use this extra $100 (or whatever amount is feasible based on your budget) to add to the payment on your smallest debt.
The more you pay toward your principal, the less you’ll pay each month in interest. You’ll start cutting down your debt piece by piece.
4. Cut Corners (Seriously)
Cutting spending is essential for your financial health. You’ll need to stop caring what people think about you. This can also help you cut out some of the people in your life who may not care about you as much as you originally thought.
At the end of the day, if your friends stop caring about you because you aren’t willing to go out to expensive restaurants or go halfsies on a vacation package, chances are they weren’t really friends, to begin with.
You’ll want to start living like you’re broke. It may sound extreme, but it’s the quickest way to get yourself out of debt. As soon as you’re back on track, you’ll need to use these new financial habits to keep your finances in check.
Don’t fall for the trap of trying to keep up with the latest tech gadgets. Look at repairing items when possible. If you already own a drone instead of buying a new one if you accidentally crash it look at options for repair which could save you 100s or even 1000s of dollars.
Getting your debts paid down doesn’t count for anything if your old spending habits return. So skip the movie date and opt for dinner at home. After all, love isn’t about how much you spend. Learn more If you want some other nifty ideas on being thrifty and saving money.
5. Sell Something if You Need To
If you have assets that you aren’t using, or that you can get by without, sell them. Various websites and apps make selling things easier than ever.
Platforms like eBay and OfferUp can be used to help you offload some of your unneeded goods. Use this extra cash to start making larger payments on your credit cards and loans, and you’ll get out of debt faster. If you are in the process of downsizing and have a lot of stuff around that you want to eventually get rid of look at various storage facilities to see what your options are. Downsizing and storing some items until you sell them may be cheaper than living in a large house.
6. Get Your Credit Score Under Control
If your credit score isn’t looking so great, you’ll want to start working on it. Raising your credit score has lots of great benefits. If you’re looking to qualify for a home or auto loan, you’re likely to receive a better rate.
This can vastly change the size of your monthly payment. The better prepared you are when you need to take out a loan, the better result you can expect.
Spend some time researching your financial situation. Google and YouTube are your friends. The more time you spend learning to handle your money, the more you can expect to see in your account.
7. Use a Credit Monitoring App
If you’re looking to get the credit score back on track, you’ll want to use credit monitoring software. App-based credit checkers won’t ding your credit history, but they can offer some important insight into your progress.
Examples of credit monitoring apps include Mint and CreditKarma. These apps can also help you track down debts that may be in collections.
Even better? Many of these apps send you alerts. This will help keep you informed of bank fees, credit card due dates, and outstanding financial obligations.
8. Consolidate Remaining Debt
If you have remaining debts that you need to pay, you may want to consider taking out a personal loan. If your credit score isn’t back on track (yet), you may want to consider bad credit loans that may be available to you.
Take the time to explore your options before committing to a new loan. You’ll want to ensure that the amount of money you’re spending is saving you money in the long run. An added bonus? You won’t have to worry about multiple due dates and unexpected auto payments.
Need More Personal Finance Tips?
If you need more help, we’re here to offer you the information you need. Now that you know more about your financial options, it’s time to put what you know into practice.
Use our personal finance tips to improve your credit score, financial health, and overall happiness. We’re here to help you meet your financial goals.