- Make a budget. Telling your money what to do is really the primary job of a budget even though most think of a budget for tracking monthly expenses. It really boils down to intentional spending, being proactive instead of reactive.
- Emergency fund. Set aside $1,000 for an emergency fund because you will have an emergency, such as needing to buy new tires and all those unplanned and unexpected expenses. Before you start paying down debt, establish an emergency fund first.
- Debt snowball. Start by paying the smallest amount owed to the largest regardless of the interest rates, concentrate on paying off the smallest amount. Once that’s paid off take what you were paying and roll it to the next smallest amount and so on until you are debt free.
- Financing happiness. It’s super easy to start comparing your lifestyle with others especially on when you see your friends and connections living life large on Facebook buying new cars, taking expensive vacations and constantly eating out. Too many people confuse fun with happiness, you can buy fun but you can’t buy happiness. Happiness is hanging out with friends, having a nice dinner with your spouse and creating special memories that are priceless.
- Look at your needs vs. wants. Spending money always comes down to needs and wants. The basic needs are shelter, food, utilities, clothes and transportation. The wants are online streaming services, cable, fantasy football leagues and of course holiday costumes for your dog. Take a closer look at the blurred line between needs and wants and how they tend to create debt such as you need a car but do you need a brand new one? As soon as you identify and separate the needs and wants you’ll be on your way to making better decisions.
- Eating out. When you are in the middle of a job search or working non-stop, eating out can be convenient as well as a boost to your spirit. There’s no problem with eating out, just be mindful that convenience adds up..
- Student loans. Unfortunately most graduate with debt, but plan to start paying the loans back as quickly as you can by not settling for making just the minimum payment, rather double up or triple your payment as soon as possible.
The most important thing to remember is that no matter where you are in life, whether you are just graduating or facing retirement, it’s never too late to take control of your money and learn new habits. Contact us for help and be debt free in no time!