3 Quick and Easy Ways to Improve Your Personal Finances NOW
While the pandemic has disrupted our personal lives, many people nevertheless are still employed. Some work from home while others sit in socially distanced cubicles. As we cut back on travel, eating out and other entertainment, you may find your savings have grown.
So why are you still coming up short at the end of the month? Why do you have no idea how you spent all your paycheck?
Capital Budget Strategies, LLC, Austin’s best Financial Coach, suggests making these 3 easy financial moves now to vastly improve your financial situation.
Step 1: Create an Emergency Fund
You have heard this repeatedly, so it must be important. If your car broke down today, would you have $750 cash to get it towed and fix that broken axel? If not, you would probably use a credit card and add to your debt.
Most people have a bank savings account so designated it as your Emergency Fund. Every month, add as much as you can to the account until you have $1,000 saved. Then leave it alone until that emergency occurs – medical bills, broken HVAC, car repairs, etc. (Sorry, a sale on blankets on Amazon is not an emergency!)
Step 2: Attack Your Debt
Why do people have credit card debt? Because they could not afford something and decided to pay huge interest rates to obtain it. Of course, there are emergencies where debt is a necessity, but that is not what we are addressing here.
There is “good debt” where you are paying for investments like school loans and a mortgage. Then there is the “bad debt” like car and credit card loans. These are debts where you just keep paying very high interest for something, admit it, you probably did not really need.
Start paying as much as you can over the minimum required payment each month. Rather than buy new clothes online, plow that money into becoming debt free.
Consider this, companies are desperate to hire. Help Wanted signs are everywhere and even pay has increased. Consider a part-time job and use all that new income to pay off your debts. Wow, what a great way to become debt free! To ease the pain, find a fun job, such as working in a cool store on South Congress or a hip new restaurant. It is an employee’s market out there!
Step 3: Build a Personal Budget
Saved the best for last! No one, except our Austin Financial Coach, gets excited about building a budget. But you need to know how your money is being spent. You might find you are spending way too much on happy hours and not enough on saving for a new car. (Saving for new car? Who does that?)
Tip: save every receipt for one month. Then determine how much you spent in separate categories, such as Food, Housing, Entertainment, Debt Repayment, Clothes, etc. With this information, you can create a budget, so you do not overspend in one area, while underspending in another area.
Need assistance? For only $149, The Austin Money Coach of Capital Budget Strategies, LLC, will meet one-on-one via Zoom. During an approximately 4-hour session, we will determine your Net Worth, reviewing your saving and spending habits, create an Emergency Fund, build a personalized monthly budget and review your retirement savings. If needed, we will even create a Snowball Debt Repayment Plan, which is the best way to pay off debt.
Stay safe Austin! And take this opportunity to get financially organized. Contact our Austin Financial Coach if you need assistance.
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