Are you spending a lot of time feeling worried about your current financial situation? You are not alone. The pandemic has left many people with strained finances all over the USA. According to USA Today, more than 55 million Americans have filed for unemployment in the last six months.
If you are struggling with money and want to reclaim your financial stability, here are some ways you can start:
Common financial mistakes
These are some of the most common financial mistakes that can lead people to economic hardships.
Excessive spending: what many people don’t realize is that excessive spending doesn’t always involve spending thousands of dollars at a time on unnecessary things. If you spend $25 on eating out per week, it will cost you $1,300 a year. This is money that could be spent on your mortgage or a car payment.
Living on borrowed money: many people buy most of their purchases on their credit card, which can be terrible for your bank account. Credit card interest rates make the price of the charged items a great deal more expensive. It also means you are more likely to be spending more than you earn.
Living paycheck to paycheck: living paycheck to paycheck can be incredibly dangerous, as it means you have no savings in case something goes wrong and you need cash quickly. Many financial planners will tell you to keep three months’ worth of expenses in an account where you can access it quickly.
Reclaim your financial stability
When you have financial stability, you feel confident about your financial situation. Here are some ways you can reclaim your financial stability:
Start budgeting: you’ve almost certainly heard this advice before, but so many people still aren’t budgeting. When you keep a budget, you immediately know where all of your money is going, and how much is coming in each month. Once you know how much money you have per month, you can start taking control of your finances properly and begin to understand where you can cut back your spending.
Pay off your debt: this is one of the most important tips. If you are in a significant amount of debt, it will be almost impossible to reach financial stability. Start by paying off any credit card debt you may have, then focus on trying to pay off your student loans. However, make sure you prioritize these types of debts over your mortgage, as you have time to pay it off once all of your other debts are cleared.
Start saving: one of the most vital parts of financial stability is ensuring that you have enough money in savings. Start by working out how much you can afford to save each month, and cut down on any frivolous spending when you begin to save.
Saving money is easy with these free tips
Learning how to save money is imperative when trying to reclaim financial stability. Here are three easy tips to help you save money:
Check your bills: many people are spending too much on their bills (whether that be for your internet, insurance or your utility bills). Since a lot of people put their bills on auto pay it is easy for bills to increase and it goes unnoticed, so it is important to be consistent with checking your bills and finances. By checking your bills it will also tell you what bills you might need help with. For instance if your Infinite Energy bill is significantly higher you might want to look into ways to lower your utility bill by either implementing energy efficient tips or comparing providers to make sure you have the best rate.
Cut back on takeaways: many of us spend far more money than we realize on eating out, coffee and takeaways. By making a few switches and cooking more meals at home, you can save hundreds of pounds by the end of the year.
Cancel useless subscriptions: are you spending money on a subscription for a gym you never go to? Or a streaming site you never use? Cancel them, and put the money in a savings account.
Reclaiming your financial stability doesn’t have to be difficult. Follow the steps above, and you should begin to feel more calm about your financial situation.