Even though the economy is reopening and people are going back to work, COVID caused a lot of financial hardship. Daily expenses quickly overshadowed even month of savings, leaving many destitute. But if you’re finally able to start saving again you might now know how to go about it. Here’s a few tips to help you get your finances in order and work toward financial security.
Determine the Source
Excluding the pandemic, losing control of your finances does not happen for no reason. There’s always a reason why your finances went awry. Take a look at your monthly bills and the money you spend on entertainment. Excluding the cost of living, you need to identify the source of financial loss. For instance, if you find yourself eating out more than at home, that’s an easy fix. Make it a priority to prepare most of your meals at home throughout the month. Not only will you save money, but you’ll probably enjoying eating out more when you have the occasional splurge.
Craft a Budget
Once you have figured out where your money is going, you can then focus on creating a budget. Make a list of your expenses, in addition to the money you consider mad money. This should include housing, food, utility bills, car payments and student loans. Other expenses may include a gym membership, a monthly coffee run and clothes shopping. As you go over your expenses, you might find yourself in shock at how much you spend every month.
If you realize that you are spending more than you originally thought, you will need to lower your monthly expenses. This means cutting out the monthly splurge and discontinuing any subscriptions. It’s also a good idea to pay off your student debt as quickly as possible. You can accomplish this by refinancing your current student loan into a new one through a private lender. Using student loan refinance options can be obtained through any lender, but private lenders usually offer lower interest rates and repayment terms overall.
Saving money and still enjoying life is possible. Create a series of goals you want to reach by the end of the year. You can set financial goals for the next 30, 60 and 90 days, which you know you can keep. Once you surpass your 90-day benchmark, you can then create another goal for the following three to six months.
Review Your Credit Score
If you want to buy a home or be approved for a credit card, you need a high credit score. Make a point of reviewing your credit reports at least once a year. Look for errors in reporting and contact the lender if you happen to find any. Inaccurate information on your credit report can disqualify you from being approved for a variety of financial products. You could also be considered a high risk, which means if approved, you will most probably be given a higher interest than someone who is considered low risk.
When time is on your side research and execute tips to improve your credit score that have to do with your personal finance habits. You may be surprised to learn exactly what is helping and hurting your standing. Being able to correct all bad habits in advance of a loan application is always advantageous.