Would you like to reduce your debt while increasing your savings for your retirement or another project, or just to find peace of mind? And you do not know where to start? We’ve put together this writing for you to learn about proven ways to improve your financial health.
Make a budget
Whichever method you use, a well-made budget allows you to establish all your monthly cash inflows and outflows. So you can see if you are in deficit at the end of each month, but also where you can reduce your expenses (some expensive hobbies, perhaps?). Review your budget regularly to see how your finances are going and to see if you are getting closer to your goals.
Pay off your debts
If you have accumulated debt, now is the time to build a plan for paying it off. List all of your debts and find the one with the highest interest rate (this is often the credit card with an interest rate of around 20%). If possible, pay off that debt first, then use your payments on the next.
Do you manage to pay off one or more of your credit cards? If you find it hard to resist the temptation to use them, consider eliminating a few as soon as your last payment is made. Also, avoid incurring other debt by buying only what you can afford during the month on credit.
Are you having problems navigating through your multiple repayments? Debt consolidation might be a viable option for you. It involves collecting all of your debts in one place, into one loan, and with a lower general interest rate.
Explore investment options
Stocks, foreign currency trading, cryptos, commodity assets…So many investment solutions are available on the market. You need to find the ones that meet your needs, allowing you to achieve your goals. You can invest via bank investment service or through the online brokerage service. Find out how they work and how you can withdraw your contributions when the time comes. Reading broker reviews is a good starting point to figure out the best investment platform. In any case, even the smallest amount committed will grow over time, and you will come out on top!
Perks of automated savings and investments
Do you have the annoying tendency to make your payments late? Pre-authorize direct debits to get your bills paid on time and avoid late fees. If you worry about running out of money, prefer a pre-approved payment corresponding to the minimum amount of your bills.
Also, consider automating your investments and savings. If an amount of your payroll is directly invested in a savings account, not only will you not have to think about it, but you will not see that money appear in your main account. It will prevent you from using it during the month and avoid not placing it at the end of it.
Build yourself a safety cushion
No one is immune to new unforeseen events (job loss, illness, car breakage, etc.), and you certainly don’t want your financial health to take a hit with hard-to-make payments. To cope with unexpected situations, create a cushion that matches your monthly expenses for 3 to 6 months.
With these precious savings, you will not lose your accumulated investments at the first major problem encountered!