Ask Away Blog: 4 Ways to Rethink Your Finances

4 Ways to Rethink Your Finances

Tuesday, September 22, 2020


Over the past few months, many people have begun to have financial issues. Maybe you were sick with the novel coronavirus or busy taking care of an ill loved one, and you couldn't go to work. Perhaps your job shut down because it was not deemed essential. Regardless of the source of your financial difficulties, it's time to regain control of your finances with these four steps.
 
1. Get Rid of Unnecessary Belongings

Your house is full of things that you don't need. Not only do these possessions take up space, but they are also valuable. Rather than letting your unused belongings gather dust in the attic, take them to a pawnshop such as Monte de Piedad. Resist the temptation to use the cash you receive to purchase more things; instead, put it in your savings account.
 
2. Analyze Your Spending

Now that you have a little room in your budget, it's time to take a careful look at your spending. If you have a budget, are you sticking to it, or do you regularly exceed it? If you don't have a budget, where are you spending most of your money? Once you've answered these questions, look at your spending on necessities. Figure out how to balance these expenses with the cost of entertainment and other unnecessary purchases, and make a new budget that accurately reflects your spending. Be realistic, but try to limit your nonessential purchases until after the financial crisis ends.
 
3. Stay on Top of Your Debt

Between student loans and your house's mortgage, it's easy to become overwhelmed by how much debt you're in. While it's all right to have some loans, you should prioritize paying off your debts as soon as possible. Talk to an accountant or consultant at your bank about ways to consolidate your debt. If your bank has early repayment fees, then simply stick with your schedule, but if possible, finish early to avoid paying extra money in interest. Do not let yourself send in your monthly payments late, as this usually results in fines. Always look out for debt forgiveness programs for which you qualify.
 
4. Prepare for Future Expenses

Look ahead to the next five years' spending. Do you have any major purchases coming up? These include college tuition, major home repairs such as replacing your roof, and new cars. If so, figure out how to start saving today. Perhaps you can take some money from your entertainment budget, or you can switch to a cheaper provider for Internet or cell phone service. The best part of saving for expenses years in advance is that you have time to experiment with different options rather than panicking and taking out a bad loan.

Looking carefully at your budget isn't fun, but it is necessary if you want to make it through this time of financial hardship. If you take these steps now, you can save enough money to live comfortably. Soon, you'll be so used to your new lifestyle that it won't even feel like you're saving.



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2 comments:

  1. Budgets aren't fun but they are very necessary for keeping track and getting a handle on our finances as well as setting monetary goals.

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