It’s many people’s dreams, if not everyone, to get to financial paradise. The cost of life, spending habits, among other things makes it almost impossible to enjoy a life of abundance. Debts seem to haunt the major population regardless of the demography.
There is hope though. Irrespective of your past, it is possible to climb out of the pit hole of debts and take charge of your finances. Here are some habits to help you gain your balance- financially!
You might have heard this before. Know where your money goes. There are enough programs that you can download for free that helps you know where your money goes. If you are not tech savvy or just prefer the traditional way of things, get a book and paper and write. Note down each expense that you incur. Every single one, no matter how small or insignificant.
It can be overwhelming if you are doing it for the first time or you are not a very particular person. Start. You may miss a few, forget another, but keep on. You can only get better at it. With this, you can tell how much money spent and what consumes the biggest part of your income.
Draw a budget when you are calm. Start with the most crucial items. Constant and inevitable bills. Capture any payments made on a regular basis. Basics such as food, transport, and others must reflect and a provision made.
This acts as a guideline, and you should always refer to it before spending. When you have clarity on your expenses, then you know how much to allocate for each item. Just like recording expenses, this may also need some time to adjust. Grow in the habit, a day at a time.
If you are deep in debts, it may look like a far-fetched dream to try getting financial liberation. You need to take the first step. Start off by paying small debts. It may look like a futile attempt, but it is something. The feeling of overcoming that one small hurdle will generate the much-needed strength and excitement to pay more. Create some provisions, albeit small, for reducing your debts. You will get there eventually.
When you know that you need to pay something, do not postpone. Late payments will attract penalties that will increase the debts and amounts owed. This makes the journey upwards more slippery.
Holding on to money might see you misusing the funds. Pay up and forget about it. Why wait then pay eventually, anyway?
This is a tall order. But without savings, it is almost impossible to move forward. There needs to be something you can hold on to when the going gets tough or in the event of unexpected. With no savings, all emergencies will force you to borrow, sending you into more debts. The saving discipline will set in once you start. It is an acquired habit.
Whenever you guarantee a loan, you are only taking responsibility. Until the debt is settled, as a guarantor you are in debt of the same. In case the primary borrower defaults, you partake of it, fully and it dents your credit record. Co-signing a loan means taking responsibility.
Assuming the person you guarantee pays on time and never defaults, the loan balance still reflects on your card limit. In case you need a loan, it will be considered hence higher interest rate if the debt is high.
Shop for alternatives before purchasing anything. Even with services, you need to get to a point where you ask yourself, ‘is Chase or Wells Fargo the better option for a student credit card? Those sobering questions lead to more research and better buying decisions.