Unfortunately, when many of us hear the word “finances,” we immediately feel overwhelmed with stress and worry. While there is no magic trick that can ensure you won’t ever have to worry about your finances, we understand why so many people wish that one such method existed. While there is no cure-all for your funding woes, what will benefit you is knowledge. By becoming more financially savvy, you’ll have an easier time managing your finances. Even if you are already in debt, then knowing more information about things like interest rates and other credit terms can help guide you back on the right track.
If you feel your knowledge of how credit card interest charges work needs some improvement, then don’t feel bad. Some people go to school for years to study these things—we know them as CPAs. Now, you don’t need to invest in a financial degree, but you might benefit from further reading about understanding the cost of debt in our Debt Relief Planning article.
Beyond that, we’ll help you with a few simple things you can do below to help you improve your financial situation immediately. Below we’ll cover a few fundamental tips that can help you set your finances straight.
Make Achievable Financial Goals
It’s difficult for anybody to know what they’d like to accomplish without a clear list of goals. That’s also true when it comes to your financial situation. So, the first thing you’ll need to do is set some financial goals. We recommend figuring out those specific goals, and then you’ll be able to plan your budget. For instance, do you have any vacation goals, retirement goals, or investment property goals? If so, write them down, because it’s likely they’ll affect the way you plan your financial strategy.
For instance, if you want to retire early, then you’ll need to start saving your money seriously right now. How much money you can save will dictate when you can retire. So, you can see how the goal of retiring early is going to influence what you’ll be doing with your money, which is saving it.
Be honest with yourself, and spend a few days writing down real achievable financial goals. Once you’ve got your financial goals written down, you can prioritize them.
Make a Financial Plan
Once you’ve set your financial goals, you should be able to create a financial plan. When making your financial plan, you’ll probably have to have several steps that apply to your strategy. Many people use their financial plans to create their monthly budgets so that they know how much money they should set aside monthly so they can pay off their debts.
After you create your plan and you’ve figured out what you need for your bills, your survival, and then what you can set aside to pay off debt, you’ll need to stick with your financial plan for a few months. Luckily, after you start paying off your debts, you’ll start noticing that you’ve got some extra cash lying around, and that’s always an excellent experience.
When you make your financial plan, you’ll also need to set priorities, much like you did when you prioritized your financial goals. That way, you can attack the essential part of your plan, then move onto the next step.
Learning how to budget successfully can pave the way to financial success. If you can set priorities and goals with your money, then the best way to stick to those goals is by using your budget so that you have enough money for everything that you’ll need. You can include whatever you’d like to add in your budget as long as you are still able to spend less than you make, save up some money, and pay off your debts, you should be fine.
Budgeting also allows you to figure out how you’d like to spend your money in the next few months or over the next few years. If you don’t have a plan, you may wind up purchasing items you want at that moment, but those items won’t help bolster your financial future over the long haul. However, if you have a budget set in mind, you’ll be far less likely to spend money on frivolous items you don’t need. We've provided a budget template to help you get started.
With your financial goals, financial plans, and your budget, you should now have everything you need figured out to help you pay off your debt. After you can pay off your debts, you’ll wind up with a bundle of extra money each month, which means extra money in your savings, and maybe even a chance to retire early! If you are still trying to decide what strategy is best to help you tackle your debt, try consulting with one of ClearOne Advantage’s Certified Debt Specialists at 866-481-1597.