How to take charge of your Finances

Taking ChaIf you feel overwhelmed with your bills and can’t seem to dig out from under, you’re not alone. Nearly two-thirds of the population is one paycheck away from poverty. This is an alarming number of people. Thankfully, you don’t have to live life this way. There are a number of ways to get your debt under control and breathe a sigh of relief.

The Six-Letter Word

Most people understand the concept of a household budget but fail to use one. You may feel that you don’t have enough money to pay your bills so why create a budget? However, that’s precisely the reason for a budget, to help you best manage your money. It keeps you on an even keel, carrying a surplus for irregular expenses like property taxes and school tuition. The wonderful part is that budgeting is easy. Once you get into it, you’ll wish you had started earlier. 

Saving Money on Daily Purchases

In order to pay down debt, you need to free up money. The good news is that there are resources to help make the process easier. For example, using an online notepad through a company like Evernote lets you keep track of your spending and do comparative shopping. Simply copy the page and save it for future reference. Awareness is half the battle. Once you know where you waste money, you can take steps to reduce it drastically. 

Monthly Bills

Many of your monthly bills have a set amount you pay. However, there are others that you have the ability to reduce. For instance, take the cable bill, which is more than likely over $200.00 a month. With so many other companies such as Hulu and Netflix offering packages for under $20.00 a month, it seems like a no brainer to switch. Bundling your auto, home and life insurance through one company can save you up to 20 percent. In some cases that will free up more than $200.00 a month.

Reducing Your Debt

If you stop using credit cards for purchases their balances will begin to go down. Credit cards are wonderful, especially those that provide perks. However, if you use them for things you want that you otherwise can’t afford, you’re going to continue to accumulate debt. Instead, when there’s something you really want, start a savings account designed specifically for that purchase. When you have the money saved, buy it using cash. You’ll own the item outright with no pending bill and no interest added. 

Open a Savings Account

Life is unpredictable and things will break and need either a repair or replacement. Having a savings account set up for those types of emergencies will prevent you from defaulting on your monthly bills. It will allow you to cover the expense and continue on with your life without the need for borrowing money. 

Passive Income

If you are currently in over your head in debt and need a faster way to recover, consider taking on a part-time job. Companies such as Uber and Lyft are always on the hunt for responsible drivers. You can also babysit or pet sit a couple of days each week. If leaving home is not ideal, there are many opportunities for work online. Online jobs like freelance writing or creating your own blog are a few examples. 

Getting Smarter

Poor spending habits often contribute to a lack of money. Thankfully, you have control over the purchases you make. Avoiding take-out while at the office and at home can save you hundreds of dollars each month. Set short-term goals to reel in unnecessary spending. Before you know it you’ll have money in the bank to fund your vacation.