by Susan Paige
Everyone can benefit from getting their finances in order. Having debt is not fun, and the worst part is the feeling you get when you realize you’re always going into debt. It can be difficult to admit, but it’s true. Here are five reasons why you’re always going into debt and what you can do about it. Research very bad credit loans directly for an extra push in the right direction for getting on top of your finances.
Make sure you have set saving goal amounts
You may not have a lot of extra money in your day-to-day life to spend on saving, but setting aside a little money here and there every month can give you a more comfortable lifestyle.
These tips can help you start saving and put you in an excellent position to work toward your future financial goals.
- Set up automatic deductions. Set up automatic deductions from your checking account as soon as you get paid. This is the easiest way to make sure you set aside money every month, and you’ll never have to think twice about it. Set up an account transfer with your bank that has the money transferred into the savings fund before you can see what’s left in your account.
- Keep saving after a goal is reached. A savings fund is a great way to achieve short-term goals, like paying off debt or saving for a vacation. But by setting your savings goals high, you give yourself more freedom to splurge on items you want now.
- Make savings fun. Saving is fun when it’s a part of your lifestyle. Pick a savings goal that inspires you, and keep it going. Don’t force yourself to put away money that you won’t use. And don’t focus on the money itself — make it about a goal you want to accomplish.
- Spend less than you earn. Find a way to cut costs, whether that means giving yourself a raise or finding cheaper ways to do things. You’ll have more money to save and build up your fund.
Everyone should create an emergency fund that will cover at least three months’ worth of expenses. It’s easy to put the teaching on emergency funds on the back burner, but you can’t just “wing it.” Putting off an emergency fund will only lead to more debt problems in the future.
It doesn’t have to be substantial, and in fact, it may be better if you build it gradually. What’s most important is that you don’t drain your savings.
Start by setting aside £25 a month. That doesn’t sound like much, but by the time you’re two months in, you’ll have £300 in the bank. If you maintain a regular savings account, you can grow that to £1,000 in three months.
Find alternatives to high-interest credit cards
Avoiding credit card debt is a challenge for most, but paying off the balance every month is even better. If you’ve been paying off your credit cards, you might want to think about signing up for a rewards credit card. While rewards cards are tempting and likely to be offered to you by your current bank, other credit card issuers may offer credit cards that give you more rewards and allow you to pay off the balance in full every month.
Track your spending
Being aware of where you’re spending your money is a great way to save money. It’s easy to get caught up in the frenzy of daily life and forget about where your money is going. If you’ve been spending more than you’re making or just looking for ways to save, it’s helpful to track where you’re spending it.
One of the easiest ways to keep track of spending is by maintaining a checking account register. You’ll likely already have a chequebook register, but if you don’t, it’s better to start one than to keep using cash. You’ll quickly discover where your money is going.
If you already use an electronic chequebook, you can still use a paper register. Just write everything in it and carry it with you. That way, it’s easy to cross out purchases you’ve made or items you’ve set aside. Another option is to use a spreadsheet and categorize your spending. It’s easier to track money as it’s spent this way because you can easily see where you’ve spent your money.