Adulting can be difficult, especially in terms of finances. If you are not well-off, whatever you have, in terms of finances will be from hard work. However, if you came from a bad start or if you happen to experience an unexpected event that may affect your personal finances.
Saving should be a part of your financial routine to be on top of your financial life. However, it would not be possible with debts at tow. Eliminating debt is the sure fire way to get your finances straight and start saving for a better future.
To begin with, it would be ideal to use an income calculator to know your current situation in terms of your financial income. In general, an income calculator simply determines the amount of disposable income that you have. You can also add your income from other sources to be able to determine the amount of disposable income you have.
Next would be determining the amount you owe. Knowing all your liabilities helps you prioritise and allocate accordingly as to which debts you should eliminate first. To start, it would be better to eliminate the loans or debts that have higher interest rates. This will help you save in the long run.
Here are additional tips that you can do to get your finances straight this 2019
Consolidate Your Loans
Consolidating your loans gives you the chance to deal with a single interest rate rather than several different ones per loan account. Say you have two personal loans with an interest rate of 12.5% and 13.7% respectively. Both amounts payable in two years. Add up a car loan with a 16% interest that has a remaining loan term of 3 years. If you’ll get a new loan to pay for the remaining principal plus interest rates of this three loans, with an interest rate of 12%, you’ll be able to save 5% of total interest on your first loan, 1.7% on your second and 4% on your third loan. The interest rates may seem small but when accumulated could be equivalent to thousands of dollars in savings.
Track Your Spending
To be able to determine areas in your finances that can be adjusted to work for your advantage, tracking your spendings, diligently would be ideal. Having a record on where your money goes helps you identify the exact areas where you can adjust your budget accordingly. If you notice yourself spending too much on signature coffee, chocolates, dine-in restaurants and the like, you might want to reconsider getting cheaper alternatives, or cutting your budget on these items for the meantime.
Choose Cheaper Alternatives
Using quality services, most of the time, is expensive. But, you can still avail quality services at a more reasonable price. You just have to learn to look elsewhere. Search for cheaper options for your mobile plan, internet or gym membership. If it is possible to ditch your car for a cheaper car that works as efficient as the current one you have.
You can still save even while paying debt. It is just a matter of allocation and learning to control your budget. Some have a hard time paying themselves and saving because they feel that they are obligated to save a certain percentage of their salary.
In saving, you need to start somewhere. Taking a fraction of your salary that would not hurt your budget. Keep this amount and make it your savings.
You can keep every $5 you receive, save $20 every payday or simply save a small amount, a varying amount every payday just to fatten up your savings account. If your finances starts to improve and you have eliminated as much debt as you can, you can auto-debit a certain amount, every month to your savings account to build your savings fund.
Just like losing weight, you can get your finances straight by keeping yourself determined and focused on your goal. You will get nowhere in terms of your finances if you fail to stick with your budget. Creating a balance in your finances is challenging. But if you surpass the challenge, you’ll reap rewards more than you could ever imagine.