Six Tips To Take Control Of Your Financial Situation
When money is tight and there are bills to be paid, it leads to stress. Stress leads to depression, which can lead to more expenses as you desperately try to make yourself feel better and find a way out of the situation. The spiral continues.
No one wants that. To avoid the downward spiral of a poor financial situation, where you have more bills than income and you don’t know how to get out of it, follow these six tips.
1. Create a budget.
Sit down and take an inventory of all your bills and expenses. Figure out how much you spend each month on your rent or your mortgage, how much you spend on utilities, how much you spend on groceries, entertainment, etc. Then calculate how much income you generate each month, and set aside a portion of that income to cover the areas you’ve written down in your budget. With the information laid out in front of you in an easy to read way, you can find out where certain items can be eliminated and where others can be consolidated. A budget serves as a sort of road map for where your money goes and helps you to take control of your spending. If you need help, look for tools like Ynab and others as they can help you budget and stay on top of your expenses.
2. Pay bills online, automatically.
Now that you’ve got a budget, find out which of your bills can be paid online straight from your paycheck. Why? Out of sight, out of mind. When the money goes where it needs to before you see it, you’re less likely to spend it on frivolous expenses that aren’t necessary. Most utility bills can be paid automatically, and some places are allowing rent to be paid online, as well.
3. Use a phone app like EvolveMoney.com to pay your bills.
EvolveMoney.com is an app for smart phones that allows you to pay more than 10,000 different bills in one place, with one password. This is an expansion of point #2, allowing you to handle your bills without ever leaving your home. Their bill pay online system makes it easy to manage your bills and stay on top of due dates and away from late fees. The app will send out push notifications and reminders when bill payment dates are approaching, meaning that you no longer have an excuse for missing payments.
4. Consolidate credit card debt.
Take a single card with the highest credit limit and withdraw cash from it, and use that cash to pay off all your other cards. Will it put you further into debt? Yes and no. While you’re using one card, you are reducing the amount you owe on others. This means that you can eventually cancel the others once they are paid off and use that one, single card, making life easier when there is less to manage.
5. Start an emergency fund.
When you start to crawl out of debt, take some of the extra money you have and put it into an emergency fund. This way, if something were to happen such as your car breaking down, you won’t need to use credit cards to handle it. You’ll have money set aside for just such an occasion. If you ever use this fund, make sure to put money back into it later.
6. Open a retirement account.
Finally, when your finances have become more stable, open a retirement account. You might not think you need it, but if you put a little bit in each paycheck, by the time you are old enough to access the account, you’ll find quite a nest egg inside to get you through your old age.
Financial peace is a matter of knowing where the money goes and not being a slave to your debt. Anyone can get out of debt with a few smart steps and a bit of dedication.