Your financial situation is a bit of a mess. That’s okay! It doesn’t have to stay a mess forever. You can fix it. Follow these four steps to get your finances in order once and for all.
1. Start Budgeting
Spending blindly is going to get you into trouble. One day, you’re going to miscalculate how much you have left in your accounts.
The good news is that you can avoid declined credit cards, overdraft fees and embarrassing moments at cash registers when you make a monthly budget. A budget will show you which costs you can afford to take out of your income, and which ones need to be trimmed down or removed entirely. You’ll be genuinely surprised by how much you can save.
Pick the format that works best for you:
- Download a budgeting app like YNAB, Mint, MYLO, or Goodbudget
- Open Excel or another spreadsheet program and fill out its budgeting template
- Do it the old-fashioned way, using a piece of graph paper, a pencil and a calculator
- 2. Make a Debt Repayment Plan
2. Make a Debt Repayment Plan
Tackling a large-scale problem like debt without a clear plan isn’t going to work. You need to use your budget to figure out how much money you can allocate to your debts every month, making sure that you don’t rack up late fees and penalties. You also need to prioritize your debt by severity and interest rate — focus more on the debts with the highest balances and interest rates because they will be harder to tackle in the future. A strong repayment strategy can get you out of the woods.
3. Get Professional Help
If you don’t think that you can get out of your debt all on your own, your next move should be to get professional help. A bankruptcy trustee that offers Consumer Proposal & Bankruptcy Services in Hamilton will take a look at your financial situation to see what you can do to get effective debt relief. It could be credit counselling, a consumer proposal or personal bankruptcy. After figuring out your best solution, they will guide you through the steps and help you get back on your feet.
4. Save for the Future
Once you handle your debt, you can start thinking about long-term savings plans. These will be the safety nets to catch your fall whenever your income disappears or falls short.
No matter how old you are, it’s always a good idea to start building up a retirement fund so that your golden years are comfortable. This is especially important if your workplace doesn’t offer a pension or any retirement benefits whatsoever. You will need to take the initiative to help yourself.
You can also put together an emergency fund so that you can handle any unexpected expenses or drops in income without going into debt. You can always turn to your stash of savings whenever you have car trouble, plumbing problems or any other unpleasant surprise crops up.
All four of these steps will help you get your financial situation back in top shape. Your budget will keep your spending under control. Your debt repayments will be complete. And your savings accounts will be growing bigger with each month that goes by.