Getting your personal finances under control shouldn’t be an uphill battle. But there are some things that you want to consider doing before you get started on the path of debt reduction. More than 30 percent of Americans are not even prepared for retirement, something that can really come back to haunt you at a later time. The good news is that by using this simple method, you can actually get on top a lot sooner than you think.
Assess Wasteful Spending
Take a look at your finances. Assess where you are spending the most amount of money each day and determine ways that you can reduce that spending to increase your savings. Things like making coffee home and packing a lunch for work can save you hundreds per month and thousands per year. Or even bringing your own water bottle, eating out less often, renting movies instead of going to them and so forth. Try and think of any way that you can cut back, and you’ll see the pennies add up quickly.
Pay Down Your Credit Cards
The first step that you will want to take is to reduce your credit card utilization by a lot. Credit cards carry an astronomically high interest rate. They cost a lot more than you think in the long run. By eradicating your minimum payments and high interest balances, you’ll be able to save a lot more excess cash for a rainy day. Consider using zero interest balance transfer offers to help you pay down the principal faster. Also, look into personal debt consolidation loans to lump your debt into one low interest payment.
Create a Savings Plan
You’ll need a savings plan in place if you are to be successful in this venture. The best way to view your savings is to pretend like it is a monthly bill, just like your car payment. Start writing checks to your savings account with a due date every month. Charge yourself a late fee every time you miss a payment, too. Do this, and you can get back on track with your finances faster than you even think is possible.
If you remain determined, you can save a lot of money by being more frugal. In just a few months, you will marvel at how much more in control of your finances you truly are.