Chances are, you started the year off with a few financial goals. Maybe you wanted to save a certain amount of money or pay down debt. Regardless of what it was, how is it going? If you’ve fallen off track or haven’t even started, don’t worry. There’s still time. This article shares five ways to help you boost your finances before 2022 comes to an end:
How’s your credit score? If it’s on the lower end, you should focus some of your energy on improving it. Your credit score determines a great deal, from whether you’re able to buy a new car to if you can purchase a home. The better your credit score, the more likely you’ll be approved for a loan with lower interest rates.
There are several steps you can take to improve your credit score. One way is to apply for a secured credit card. Unlike traditional cards, secured cards require an initial deposit equivalent to your card’s credit limit. This deposit acts as a safeguard the lender can pull from if you miss a payment. Because of this deposit, secured credit cards are easier to get approved for if you have a low score.
Keep in mind that there are different types of secured credit cards. For instance, you can apply for a credit builder card. These typically don’t require an initial deposit or have high-interest fees, making them a more affordable option.
If you’re struggling to manage your finances, the first thing you should do is create a budget. Creating a budget can help you gain a deeper understanding of your finances and spending habits. It can also help you adopt better habits that lead to saving more money.
There’s a common misconception that creating a budget is difficult. Well, it doesn’t have to be. All you really have to do is know your monthly income and necessary expenses, like rent, car insurance, and student loans. Then, subtract those expenses by your income to find your discretionary spending for the month. Consider this amount “extra money” you can put toward whatever you like.
Keep in mind that you want to be smart about how you spend your extra cash. For example, instead of buying something you don’t need, consider putting more toward your student loans and debt payments. Remember, the goal of budgeting isn’t to figure out how much money you can spend frivolously. It’s to help you adopt healthy habits to find financial freedom.
Debt can play a huge role in your finances. It can make it difficult for you to save money and even afford necessities. And while paying off debt isn’t easy, it’s not impossible. The first thing you need to do is create a plan. Luckily, experts have created several methods for paying down debt.
A popular option is the snowball method. With this, you focus on paying down your smallest loans first. What’s nice about this method is that you’ll actually see your loans disintegrate, which could help alleviate some of your financial and emotional stress. Once your small debts are paid, you can then start putting money toward your larger ones.
Another option is the avalanche method. With this, you focus on paying down your debt with the highest interest rate first. Once this debt is paid you should then focus on paying down your smaller loans. There are different schools of thought about this method. While paying down debt with high-interest rates can save you money in the long run, it will take more time. Unlike the snowball method where you’ll see your debt disappear, the avalanche method will take a bit longer.
According to research, many Americans aren’t saving money. In fact, a report by AARP found that 53% of United States households don’t have an emergency savings fund. If there’s anything people should have learned from the pandemic, it’s that anything can happen. It’s a good idea to be financially prepared.
With that said, saving money isn’t always easy, especially if you’re also trying to pay down debt. But it’s also worth mentioning that you can pick and choose how much money you save. While there are suggestions, there’s no rule you have to put away a certain amount every month. Saving money should be a passive approach and one you determine based on your budget and lifestyle.
The first step to saving money is to open an interest-bearing savings account. Then, take a look at your expenses and income to determine how much money you can allocate on a regular basis. Again, the amount is completely up to you and could be as small as $10 a week or $100.
Chances are, you have a few recurring bills you don’t necessarily need to be paying for. Maybe you pay a monthly fee for a gym membership you haven’t stepped foot in for months. Or maybe, you have several other subscriptions you rarely use or don’t really need. According to a study by Chase bank, 71% of Americans waste an average of $50 a month on unwanted subscriptions.
To avoid wasting your money, spend some time reviewing your expenses and highlighting recurring fees. Then, determine whether or not you should keep or cancel. To help make this decision, ask yourself a few questions. Do I use this subscription? Is there a cheaper option available? Does this improve my life? Is it worth the money? If you answered “no,” it’s time to let go.
Many people want financial freedom, but it won’t happen overnight. You have to work toward this goal, and now is the perfect time to start.