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5 Steps To A Stable Financial Future
You are not the only one who finds it hard to keep track of your money and pay off your debts. Whether you need to get out of a huge amount of debt or just want to be more responsible with your money, these seven tips can help you stay on top of your finances.
Set Up Automatic Savings
One of the hardest things people have to do is save money. When that direct deposit shows up in your bank account, spending more than you should can be enticing.
Because of this, you should set up monthly transfers from your checking account to your savings account. Think about how your taxes are taken out of your paycheck automatically. This money doesn’t bother you because you never saw or touched it. The same thing will happen if you set up your savings to happen automatically: you will be much less likely to spend money that never shows up in your bank account.
Some surprises are worse than others in life. If your home is damaged by something that isn’t covered by your insurance or you have an unexpected medical emergency, you could get into severe financial trouble.
So, it’s never a bad idea to set up an emergency fund to help pay for costs that come up out of the blue. Try to save enough money to cover your living costs for at least three months. Once you’ve saved this money, don’t touch it for anything but an emergency, no matter how tempting it might be.
Stick To A Budget That Makes Sense
The most important thing you can do to build good money habits is to make a budget and stick to it.
You should definitely:
- Calculate your income
- Quantify your necessary expenses
- Make a plan for the money you have left over.
- Don’t spend money you don’t need to.
You might want to use apps like Mint or crypto accounts to help.
Almost anyone can cut their monthly costs by finding and getting rid of unnecessary expenses. Especially if you’re using credit cards or personal loan companies like Affirm to pay for things you can’t afford, you should look at those costs and cut them out. This could include several different types of spending, such as:
- Streaming services you don’t usually use (i.e., Netflix, Now TV, HBO, etc.)
- Eating out;
- Take outs;
- Spending too much on food and clothes;
- Memberships to gyms
These and other costs can add up to more than $100 a month that would be better used to pay down your debts.
Every Month, Pay Off Your Credit Cards
When you use a credit card, you should plan to pay off the balance before interest starts to add up. But many Americans leave a balance on their credit cards for months or even years. This is made worse because most credit card companies have very high-interest rates.
Still, you don’t have to avoid credit cards since many have great perks like cash back and airline miles. But if you want to be responsible with your money, you should pay off your credit card balance in full every month.
These tips will help you to get started with becoming financially stable. Do you know any other tips that could help? Pop some of them in the comments below.