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Tips for Shoring up your Finances in 2017

Tips for Shoring up your Finances in 2017

Von Goethe wrote, “Many people take no care of their money ’til they come nearly to the end of it …” The new year is time to create new resolutions and revisit old ones. One-quarter (25 percent) of Americans want to spend less and save more money as part of their resolutions, according to Nielsen. Unfortunately, far too many people break their promise of becoming more fiscally responsible. When it comes to your wallet, it’s key to be disciplined and have a good game plan. Here are ways to do just that and have a prosperous year.

  1. Measure your money.

As the saying goes, “What gets measured gets managed.” Create a budget and differentiate between your needs and wants. It’s key to know your disposable income so you’re clear about spending limits. Growing your bank account simply involves putting in more money than what you take out.

Moreover, you should be realistic when creating your budget and to remove non-essential items from your buying list. Non-essential spending usually arises from impulse shopping. It is comprised of things that don’t add much value to your life over the long-term and that end up as junk in your garage.

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  1. Pay on time and track your credit.

Paying bills on time will avoid negative reports on your profile as delinquencies will lower your score and increase your borrowing cost over the duration of the loan.

Most Americans want good credit. A 2016 Credit Confidence Study by Capital One found that 86 percent of respondents say they want to increase their credit score while 82 percent say they’re willing to do what it takes to improve their score. How does this metric improve your finances?

Your credit score affects your ability to get key loans such as car loan or home mortgage. Moreover, your credit profile impacts your borrowing costs and ability to pass a background check. Each year, you can access your credit report from the three major credit bureaus, as provided by federal law. There are free apps such as CreditWise that let you monitor your score without adverse consequences to your credit profile.

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    1. Leverage technology.

    Your smartphone is the gateway to discounts and perks offered by companies that want to attract your business. Consider downloading mobile apps offered by your favorite retailers to unlock savings and offers. For example, RetailMeNot and SlickDeals are all-in-one discount apps that hunt for deals from thousands of retailers. If you shop at big box stores like Wal-Mart, Walgreens, Target, and Best Buy (to name a few), their mobile apps have shopper-friendly features that let you compare prices and redeem vouchers, among other features, all from your mobile device.

    The key is stick to essentials. Level Money is an app that helps you track your key expenses and figure out what portion of your income you can responsibly spend.

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    1. Digitize and be organized.

    A paper trail of receipts, warranty cards, and gift vouchers are a thing of the past. They’re inefficient and difficult to verify when damaged or lost. Consider using mobile wallet technology which digitizes your purchase information, account details, gift vouchers, and other records.

    Also, consider using scanning apps that let you use your smartphone’s camera to scan your paper receipts, coupons and other purchase information. Storing your data in digital format gives you peace of mind when records are damaged or misplaced.

    Most everyone wants to improve his or her finances. There’s a roadmap to get there that includes creating a reasonable budget, monitoring your credit profile, using technology to get discounts and offers, and organizing your wallet. The new year is time to shore up your finances!

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    Featured photo credit: Photo credit: Flickr (commercial use & mods allowed) via flickr.com

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    Marvin Dumont

    Entrepreneur, Disruptor

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    Published on January 8, 2021

    How To Pay Off Credit Card Debt Fast: 7 Powerful Tips

    How To Pay Off Credit Card Debt Fast: 7 Powerful Tips

    Ever wondered whether your credit card debt is the reason you’re in a bad financial situation? You can’t enjoy any fun activities because a good chunk of your money goes toward debt payment. Heck, you’re even behind on some of your monthly bills.

    The effects of clumsy debt management are too many to list here. This guide is going to help you discover how to pay off credit card debt fast and start chasing your financial goals.

    Debt problems are the last thing anyone wants to encounter. But things can get out of hand when all the “little debts” you take accumulate in interests.

    What if you knew some simple and proven ways to be debt-free quickly? Implementing them would mean better financial health for you. It becomes possible to free up cash for your “wants.” These include taking a trip or buying something you’ve always desired. All that while paying your bills on time!

    Let’s not wait any longer. Here are 7 powerful tips for paying off credit card debt fast:

    1. Pay More Than the Minimum Credit Card Payments

    Many people only pay the monthly minimum on their credit cards. Truly, that’s the right amount for staying on good terms with your credit card company. But you need a different approach if you’re looking to achieve financial independence within a short time.[1]

    Most of your payments go toward interest costs when you only pay the minimum amount. A substantial sum of your balance remains standing. As a result, it becomes more expensive to eliminate your debts.

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    You don’t want to wait more than 10 years to get rid of debt while it’s possible to do it sooner. All you have to do is double that $100 minimum payment to $200 or go higher.

    The good thing is that minimum credit card payments are affordable in most cases. By paying a higher amount, you reduce your interest costs, lessen your borrowing period, and boost your credit score.

    2. Start With High-Interest Credit Card Debt

    If you have more than one credit card debt, prioritize putting the extra money toward the ones with the highest interests. This debt pay-off strategy, known as the debt avalanche method, is essential for being debt-free quickly.[2]

    First, you need to list down all the credit card debts you have in the order of their interest rates. Next, you choose the one with the highest interest and pay a significant amount toward it each month. It can be an amount twice or even thrice larger than the minimum payment.

    At the same time, you make monthly minimum payments on the other debts. Their interest charges won’t be as costly as that of the first debt on your list. You only move on to the next high-interest debt after the first one is gone. Remember that your focus is on the interest rates and not the balances.

    3. Revisit Your Budget

    Budgeting is useful for tracking your financial moves. Once you create a budget, some tweaks along the way can make it work for you better. One situation that requires you to revisit your budget is when you’re struggling with debts. It might hurt a bit to slash some expenses. But you also don’t want to miss out on achieving financial freedom in the long run.

    You can reduce some variable expenses to free up more cash for credit card debt payments. They’re the ones that change from time to time. Some examples are groceries, fuel, and clothing.

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    Other opportunities for cutting down your spending lie in non-essential expenses. Instead of dining out all the time, you can cook at home more to save money. You can also share some subscriptions with friends and pay a fraction of the cost.

    If you’re determined enough, you can eliminate all your unnecessary expenses and focus on paying off your credit card debt first.

    4. Avoid Using Your Credit Cards

    Do you want to know how to pay off credit card debt with a low income? One simple way is to stop using them. Having your credit cards everywhere you go means that you’ll be more tempted to buy unnecessary stuff. In this case, you spend money that you don’t really own and get deeper into debt.

    The quickest fix to stop the debt build-up is spending with cash. You’ll be more aware of everything you can afford at any particular time. If you decide to keep one or two cards to ease the transition, always make wise choices. For instance, only use them when experiencing financial difficulties.

    It’s best to categorize your fun activities under “discretionary spending” in your budget. This way, you won’t need more debt to kill your boredom. By halting your credit debt from accumulating, it’s easy to pay down what you already owe and be happy with the progress.

    5. Start a Side Hustle to Boost Your Income

    You’re probably turning away a lot of money by not monetizing your skills. Everyone has something that they’re good at doing. And you can use that to generate extra income for attacking your credit card debt.

    If you look around your neighborhood, you can find several side hustle opportunities. It can be pet sitting, tutoring, or lawn mowing. You can start an online business by offering services such as digital marketing, content creation, and web development. Such skills go in high demand on freelance sites and job boards.

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    Finding clients on social media is also a good strategy to utilize your skills and make more money. Facebook groups, Quora Spaces, and subreddits are some places to look for side jobs. You only have to join a niche-specific platform, share your services, and respond to any opportunities.

    It’s possible to learn a skill, practice it, and earn from it. Use the free resources online or purchase some e-courses to get started.

    6. Sell Your Used Items for Extra Cash

    Starting a side hustle isn’t the only way to generate extra money. You can turn unwanted items into cash for paying off credit card debt. Whether it’s an old TV, book, or furniture, there is always someone itching to buy your used stuff.

    A garage sale, as much as it’s old-fashioned, is perfect for getting your neighbors and passers-by to buy from you. You keep all the money because there are no business permits or taxes involved. While you may not make much cash, it’s better than leaving your stuff to go defunct in your storage.

    Other than that, you can sell your used stuff on online marketplaces. Facebook groups are great places to start if you want quick approvals and hence sales. You only have to ensure that your listing follows Facebook’s commerce policies.

    When selling any pre-owned items online, ensure they’re in good shape to avoid problems with your buyers.

    7. Know When to Seek Help With Your Debt

    Asking for help with your credit card debt can be challenging to do. But letting it drown you is a road you don’t want to take. While you may feel embarrassed at first, it’s the best way to get back on track when you run out of options.

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    There are tons of non-profit credit counseling organizations that can offer you free guidance on how to escape the debt trap. An example is The National Foundation for Credit Counseling. They simply review your finances and help you determine the source of your financial problems. After that, they match you with an actionable debt management solution.[3]

    In extreme cases, the debt solution can be:

    • Debt relief – where your debt is partially or wholly forgiven
    • Debt consolidation – taking out one loan to repay others
    • Debt settlement – the creditor forgives a significant portion of your debt
    • Bankruptcy – legal process for seeking relief from some or all your debts

    It’s necessary to carefully weigh your options before deciding on the way to go. Find out how it might affect your credit score and any other risks.

    Wrapping It Up

    Debt is a major setback when you’re trying to prosper in life. Paying off credit card debt is essential if you want to reach your financial goals. That means having more free income, a good credit card score, and even a chance to retire early. You become more productive each day because of the peace in your mind.

    So, you now have some tips on how to pay off credit fast. Go ahead and get rid of that good life progress killer!

    More Tips on How to Pay Off Debt

    Featured photo credit: rupixen.com via unsplash.com

    Reference

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