With unemployment still quite high and the economy strained, to say the least, many people seem to have more time than money on their hands. For so many US families, the money situation is a bit tight right now. Without knowing exactly what is to come, when businesses will be in full swing, and when (or if/) individuals will be going back to their jobs, it makes sense to sit down and take a close look at your financial picture. There really couldn't be a better time to make a few smart money moves and thus try and avoid having to struggle, financially speaking. There are steps you can take and things you can do right now that won't cost you anything and yet will help you potentially come out from underneath the weight of your economic burden.
By simply spending a little time each day on your personal money to-do list, especially if you currently do have more time than money, you can make a difference in how your overall financial picture looks. Some of the money moves described below are more in-depth, while others represent fairly simple and fast things that people can do to try and get ahead.
Establish your goals
In creating a household budget, you are in fact generating your monetary goals. Think about that which you need to spend money on—the essentials. That which you have to spend by way of debt repayment and also that which you actually would like to spend money on. And in developing your budget, don't necessarily cross out the want category. During this difficult time, it is important to do some things for yourself that actually make you happy. Cut other places if there is something you genuinely want to purchase. Additionally, don't forget about savings. Perhaps retirement savings for instance isn't the first thing on your mind, but even if you only relegate a small amount to a retirement account each month, at least you're getting into the habit of putting money aside to this end.
Reevaluate your spending
Once you have the budget in place and a plan moving forward, you want to look carefully at where every single dollar is going. Do you have a ton of subscriptions for instance? Do you really need them all? And when you do realize that it is an expense that you are going to have to keep, you might want to think about renegotiating that particular bill. For example, is there room to get a better deal on your cable bill? Your cell phone plan? It never hurts to make a call and see what the company in question might be willing to do for you by way of cutting down on your bill.
Car insurance is another big one in terms of lowering your bill by shopping around for a more reasonable provider. You could do this yourself or enlist the aid of a broker who will then shop it around to multiple companies. Some brokers won't even charge a fee as they work on commission.
Pay down that debt
Debt is often unavoidable; that said, focusing on paying it down where possible will help free up more money to allocate to other areas. One thing you can start doing is to pay more toward that debt that carries the highest interest rate. Additionally, look at your smaller debts and see if you can't get those cleaned up completely. Another thing that many people are currently doing in the interest of lowering their monthly debt is to refinance. Interest rates right now are relatively low; refinancing a mortgage or student loan could save you an appreciable amount of money each month.
Get money smart
Understanding all that you can about money and spending is only going to benefit you in the long run. There are a ton of resources available to help you "school" yourself when it comes to finances. From online classes and webinars to books such as "Personal Finance for Dummies," the tools you need to become money smart are out there. Even just gaining a more basic understanding when it comes to budgeting and spending will be immensely helpful.
Know where your credit stands
We live in a credit-driven world. Knowing what your credit score is, where your credit in general stands is so important to stay on top of your financial picture. Understand what factors affect your credit, things such as repayment history, credit usage, and credit mix. There are a variety of sites available on which you can check your credit now for free. Do this diligently. This way too you are more likely to catch any suspicious activity to which your credit may be subject.
Rethink your possessions/home
Perhaps the two most expensive components of anyone's finances are housing and cars. Given what we've just come through, can you still afford your mortgage comfortably? Or are you finding yourself struggling to pay the rent/mortgage every month? Same with your vehicle. These are tough decisions to make as far as downgrading, but if you are hurting from a monetary standpoint you might have no choice but to make the difficult call. If for instance your mortgage/rent is more than 28% of your total income, this could indicate that it's time to make a critical change in this respect.
Automate everything
Once you've made your money moves, once you've gotten a handle on debt and understand where your financial picture is, then automate it—all of it. The more you can have taken out automatically, the better, as you'll be less likely to forget to pay a bill.
First Union Lending wants to help. We work with small business owners across the country. We understand how difficult things are right now which is why we offer fast and flexible loans suited to a variety of business needs. Some clients even get funding within two days. Call today and let's get started together.