Financial health is something that shouldn’t be overlooked. It can mean the difference between being able to buy that dream house or claiming bankruptcy. While money is a tough and uncomfortable subject for many, it’s important not to put your head in the sand.
If you find that your finances are spiralling out of control – thanks to the coronavirus pandemic or another reason, here are 4 effective ways to get back on track again.
The first step to getting yourself back on track is by being brutally honest with the real state of your finances and assessing how you got there in the first place. To improve your situation you need to see the complete picture, so it’s a good idea to compile some information together into one big document.
Include your total monthly earnings, your outgoings, any savings that you might have, and your debts. It can be hard to see just how much debt you may have, and it might even leave you feeling guilty, but to be debt-free and in a healthier place financially, you need to face it head-on! Having everything written down in front of you will make everything seem more manageable, and allow you to come up with a step by step plan much easier.
Make a Plan
Whether you are looking to cut down and get rid of existing debts, or you want to add to your savings, you will need to come up with a budget either way. While it can be tempting to say that you will be saving over 70% of your monthly paycheck each month, is that really achievable? To ensure success, make sure that your new budget is realistic and that you are likely to more or less stick to it.
At the beginning of each new month, think about your outgoings such as bills, and then look at other areas where you can cut back on your spendings such as your food shop or travel payments. Be strict with yourself and take your leisurely expenditures, such as going out for drinks, ordering takeouts, clothes shopping, and other non-essentials as low as you can. Eliminate some altogether to free up as much money as possible to either add to your savings or to pay off your debts.
Stop Using Credit Cards
It can be tempting to use them every now and then, or when unexpected expenses crop up, but if you want to be financially healthy then you don’t want to be using credit cards full stop. Once in it, credit card debt isn’t so easy to get out of, especially if you are only paying the minimum payments every month. Lift that weight off your shoulders and make paying your cards off your biggest priority.
At the end of the day, there is a limit as to how much you can save and how much you can cut back. As with anything in life, to get results, you have to put the work in and the sky really is the limit when it comes to how much money you can earn. Finding a second job or starting a small business on the side or ‘side hustle,’ where you can get some extra cash to add to your existing earnings, is a great way to get your finances back on track and pay your debt off quickly.
Working two jobs can be tiring, but it will be worth it in the long run, and maybe you’ll even find a new passion as a result!