Sometimes it feels like money goes out the door at a rate faster than it can be replenished. Debts are a necessary part of life, but when it gets to the point where they outstrip your income, it’s time to reexamine them. It’s possible to find more money every month by examining your current debt load and finding savings that leave you with a bit more in the bank. Following are tips on how to improve your financial situation by making your money go further.
Reduce or Eliminate Credit Card Debts
Image via Flickr by 401(K)2013
Credit cards are a great financial tool when used wisely, but many consumers make the minimum payments and carry balances instead of paying what they owe in full every month. The balance builds up over time and you pay more interest. It’s harder to get out from under the balances when they grow faster than your ability to repay them.
Keeping up with monthly payments is a great way to maintain and build a credit score, but it’s better to keep them on the affordable side. A personal loan from an online lender, such as Prosper or Avant, has the potential to lower the monthly payments through a lower interest rate. It also has the benefit of being one payment per month instead of many.
Stop Throwing Good Money After Bad
Do you have a gym membership that you don’t use? Or are you making payments for a program that doesn’t offer much in the way of benefits? You are essentially paying rent for something that delivers absolutely no benefit. Maybe you signed up for something and forgot about it, only to be reminded when you looked at your account statements. Make a resolution to yourself to contact whoever is charging money and cancel the account.
It takes very little time out of your day, especially when taking into consideration how much it costs you every month. If you’re saying to yourself that it’s only $20, it’s still $20 of your hard-earned money that you should be keeping for yourself, not paying to someone else.
Start a Budget
This is the first thing a household should do when it’s formed, but many fail to take this step. It is key toward maintaining financial stability and avoiding some of the most common spending pitfalls that plague many consumers.
The budget helps you apportion your monthly income and forces you to make adjustments to your spending habits. After all, you can’t spend what you don’t have. It also gives you the opportunity to carve out extra cash for savings and makes you more aware of where your money is going. If you pay attention to what you’re spending, you’re less likely to spend when you know that you only have so much money available to you.
It takes some personal discipline to change your spending habits so you’re not broke all the time. In the long run, it benefits you and your bank account to have extra cash when you need it instead of having zero when an emergency pops up.
Great post! Thank you for sharing. I’d like to hear more from you.