Advertising
Advertising

10 Financial Moves You Need To Make This Year

10 Financial Moves You Need To Make This Year

Whatever past mistakes you’ve made, 2014 is the year to change your habits. I’ve noticed I’m an impulse spender who always looks forward to that next big purchase. No matter how much money I make, it never feels like enough, as I’m always filling previous voids. In order to break that habit, I sought the advice of several financial analysts and life coaches. Each helped me identify trends in my personal life that affect my finances. To combat it, we’ve come up with a list of financial moves I need to make this year, and you should too.

Assess Yourself

dollars Lifehack Versability

    Smurfette wept at she stared at the pile of bills she earned at the strip club…

    Advertising

    Take an objective look at your finances. Are you making enough to cover your spending while paying your past financial obligations and preparing for the future? If you’re spending based on future income, there’s an issue. You need to look at the numbers involved in your personal finance at least once a month to ensure you’re staying abreast of your current financial situation.

    T.J. Tillman, a founding partner at Empire Wealth Management says, “My recommendation is to have a hierarchical set of financial priorities and not stray from it.  The order would be (from bottom to top) paying for basic monthly expenses like food, shelter, etc., money set aside for emergency savings, money set aside for retirement, and then discretionary income to save up for major purchases. By following these guidelines, it’s possible to live a life with significantly less stress and still work towards those material things that are nice but not necessary.”

    Pay off Your Credit Cards

    Your highest interest rates are coming from your credit cards–and that’s just the start of where they get bad. Having revolving credit is only good for your credit if you have an abundance of available credit (money you could spend, but haven’t). Even this is only true of true credit cards; pre-paid credit cards don’t even report to your credit agency (you’re paying a fee to use your own money).

    Advertising

    Paying off credit cards is a vital step in treading above financial waters. Pay off cards with the highest interest rates first, and know that if you took out any cash advances, that balance is paid off last (earning the banks the highest interest rate for as long as possible).

    Strengthen Your Reserves

    Every penny you save counts. Stop looking at bonuses as “free money.” In fact, stop looking at any money as free; you have to work for every cent. Stop discrediting the effort you put into your own personal blood, sweat, and tears, and instead start paying the most important bill of your life: your monthly payment to your personal savings account. You want to have at the ability to pay at least 3-6 months worth of bills in case an emergency comes up. You’re never 100% in control of your own income, and even if you were, life happens. Be prepared for an empty tanks with a reserve can just in case.

    Settle Your Debts

    It’s never fun owing anyone; I’ve never heard someone say, “I’m so happy I owe money to (insert anyone’s name).” Settling debts will strengthen your reputation and lift a mental burden from your shoulders. Instead of thinking about who you owe what to, you can concentrate on what’s important in life. “Karma is real, baby,” explains Life Coach Melanie Cobb. “Money can’t flow to you if your incoming channel is clogged with old resentments, guilt, or small stories.” Drop the guilt and clear those burdens off your plate.

    Advertising

    Tired Until You’re Retired

    Unless you’re Benjamin Button, one day you’re going to get old. If you don’t start saving now, you’ll be one of those old people who’s still working. It’s easy to think you’ll never be that way, but it’s as inevitable as death if you don’t do something to prepare now. What if the world ended today? What if aliens invaded and are going to destroy the earth. You’re not on the president’s call list–he doesn’t even know you exist. So what will you do? If you don’t have a plan, you’re not a survivor of the zombie apocalypse; you’re a zombie.

    Habits Are Made to Be Broken

    Bad spending habits are the root of most people’s financial problems. Stores know this, and that’s why there are impulse items strategically placed throughout the store. In fact, nearly everyone is counting on you to spend money, and the only person you can count on to be responsible with your personal finances is yourself. Break free of bad spending habits by practicing discipline and focusing on your financial goals, rather than relieving your temporary cravings. Also a word of advice–eat before you go grocery shopping to keep from overspending.

    Review Your Permanent Record

    You need to check your credit report today; in fact it’s a good idea to check it at least once a month. Remember how you had a permanent record in school? Teachers would always threaten to list misdeeds on your permanent record. You couldn’t see your permanent record then, but you can check your credit report to ensure you truly are responsible for the financial decisions you’re being credited for. Now you know, and knowing is half the battle.

    Advertising

    Be Open About Your Finances

    If you keep your finances a dirty secret, it’ll eventually come out the closet to bite you in the ass. You need to be honest with people–you don’t have to tell them how much money you make or have, but you don’t need to be ashamed to tell people you’re not willing to pay to go out because you’re currently saving. They may ask questions, but you can politely remind them that you’d rather not discuss finances whenever it gets too personal. You don’t need to broadcast your checking account balance; just don’t act like you have ends you don’t.

    Seek Professional Help

    There’s no shame in asking for help. Even Michael Jordan needed coaching. People like T.J. Tillman and Melanie Cobb represent an entire industry dedicated to coaching and motivating people through the tough financial times. It’s not necessary to take on the burden of all your debt and finances yourself. Cash rules everything around me, so it’s a pretty big deal that’s worth spending time discussing with a qualified professional.

    Be Realistic

    We all want to be billionaires and spend money on all the things Bruno Mars sings about, but we’re not all CEOs, so we’re not likely to have that chance. Be honest with yourself; you can lie to everyone else, but always be honest with yourself about where you actually are. You can’t find your destination if you don’t even know where you’re at. Realistically assess your resources and options, and stick to goals you can actually stick to; it may take a little suffering, but, with resourcefulness and perseverance, you can make the right financial moves this year to bring success to any endeavor.

    More by this author

    7 Ways To Make Exercise Fun For Everyone Say Goodbye to a Skinny Body: How to Gain Weight Fast 24 Easy Ways To Make Money On The Internet What 500 Calories Really Looks Like in Different Foods 20 Awesome Screensavers that Make your Desktop Delightful

    Trending in Money

    1 How To Pay Off Credit Card Debt Fast: 7 Powerful Tips 2 How To Make a Million Dollars in 7 Steps 3 7 Cheap but Powerful Products That Can Help Your Waste Less Food and Save Money 4 How To Retire Early (And What To Consider Before You Do) 5 How To Create a Budget (The Complete Beginners’ Guide)

    Read Next

    Advertising
    Advertising
    Advertising

    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.

    Advertising

    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.

    Advertising

    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.

    Advertising

    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.

    Advertising

    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

    Read Next