Finances can be one of the most significant challenges to manage. But with a proper mindset, one can always look for a strategy to ensure that they are well organized, and you do not have to seek friends’ support before payday. COVID 19 disease taught the whole world a lot of things. When the economies crushed, restriction on movement worldwide was put in place, and there was little or no money coming in during that critical period.
Fortunately, for those people who had clear strategies, they were able to re-organize themselves, awaiting the rise of the economies.
With this experience, we came up with 6tipsto help manage your finances and get them under control. We have shared each of them and hope this will be a turning point from your empty pockets to a strategically controlled person in terms of finances.
- Create a Monthly Budget.
If you struggle to manage your monthly spending, it is essential to devise a budget and plan how you spend every month. To start you off budgeting, analyze your monthly income (the takeaway figure) and the expenses.
Allocate the compulsory costs that must be paid to avoid inconveniences such as electricity bills, food, water,and transport. There are some expenses you can opt to shelve or reduce because they are unnecessary, and you can live without them.’
Setting up a realistic budget will encourage you to practice good saving habits such as eating from home and carrying home food for lunch. This is one of the best strategies that have been tried and tested and become successful.
- Pay Off Debts.
Debts are real luggage we all carry, thinking they are sorting our financial problems. But if you critically check the extent that they use the better part of your salary, it is something that you would consider paying off. Most of these debts, such as credit cards, carry heavy interest rates leading to misappropriation of your finances.
If possible, pay off such debts as soon as possible. This can be done by working with a financial institution that offers a lower interest rate by consolidating such debts andremaining with one. There are several financial institutions, including banks and licensed moneylenders. In Singapore, licensed moneylenders are known for giving manageable interest rates that could help you pay off heavy debts. One of the reputable companies is SGP credit.
It is possible to reduce your debt using the moneylender by requesting them to give you a lower interest rate as you consolidate your debts.
- Come up with Realistic Financial Goals.
A financial goal is a strategy or rather a personal overview of the objectives that you want to set up on how you will spend or save your money. If you are pretty sure that you want to manage your finances and take control of them, then setting up a financial goal is not optional.
If, for instance, if you wish to take a mortgage in the next oneyear, plan on how this mortgage will be repaid. Is your income sufficient enough to cater for such a goal? If not, think about getting an extra source of income that will supplement the income that will be used to pay the mortgage,
On the other hand, research the financial institutions that will offer you the right support for your goals, whether in your saving or borrowing culture.
Setting goals straight from the word will give you a different focus and work with what you have to achieve your dreams.
- Choose the Right Financial Institution to Open an Account With.
Opening the right bank account is critical because it will offer financial advice for borrowing and developing a savings culture. We all do not know what life holds for tomorrow. What if there will be another lockdown in the next year? Will you have a savings fund to manage the situation?
What about emergency medical bills? All these questions can be rightfully answered after knowing how well you are conversant with your bank account. Setting up a savings fund or an investment account is necessary to help you in times of crisis.
On the same note, not all banks are out to see you rise; some have hidden charges that, if not well advised, your savings will go down with the hidden costs. Therefore, research well before settling for a bank account.
- Avoid using Your Credit Cards.
Relying too much on credit cards can make one a slave to their finances. You may find like credit cards are a saviour and act as a stop-gap measure, but this is only temporally, which will affect your finances in the long run.
If you have made up your mind about taking control of your finances, keep off spending with credit cards and possibly switch to debit cards which you can only use when you have loaded your account with cash.
You can open a savings account and apply for a debit card from which you can draw your monthly expenses, pay your bills, or even save for retirement from the kitty.
Developing such discipline is necessary, and in a short while, you’ll manage to control your expenses.
- Get to Know your Credit Score.
A credit score is a number that depicts your credit worthiness. Companiesin charge, such as TransUnion, determine this to measure your discipline in paying off debts. It is a three-digitnumber that starts from 300-850. The bigger the number, the better your credit score.
Those with high credit scores get lower interest rates from reputable financial organizations. Eventually, their monthly repayment will be lower than those with lower credit scores.
Keep checking your credit report, report any errors, and prevent any future mistakes that could lower your credit score.
Taking control is not a difficult assignment, but the motivation to start from within must begin with you. Remember that small financial indiscipline has a long-term negative effect. Therefore, take control of your finances by putting the mentioned points into practice and start flourishing within a short period.