budget

5 SMART WAYS TO MANAGE YOUR FINANCES

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Whether you are in debt and need a straightforward plan to debt-free or want to save money to better manage your finances, here are five smart and easy ways to be on your way to save money effectively.

  1. Start on a simple budget plan

    Just by looking at the general picture of your expenses, it will be a great start for you to see how bad or good your situation is. Write down what your spending is going into to see a clearer picture.

  2. Cut unnecessary expenses

    After you organise and write down where your spending is going into, you will pick up on insights that you didn’t see before such as small unnecessary purchases that accumulate over time that can add to your debt significantly. Even if it’s not significant, cutting out seemingly minor expenses can go a long way and help you save money or improve your debt situation.

  3. Make an emergency fund

    Along with cutting out small expenses, setting up an emergency fund will further secure you in times of need. Even if you’re in debt, an emergency fund will be extremely useful when you need cash fast. Your future self will thank you.

  4. Follow a debt payoff plan

    Following and being disciplined in a debt plan will help to effectively pay off your debt. One simple way is to payoff the debt with the highest-interest rates so that the fastest accumulating debt will be paid off. One another way would be to payoff the smallest debt by starting small and working your way up to eliminate debt, a great way for yourself to clear debt step by step.

  5. Negotiate and Consolidation

    Don’t be afraid to negotiate for a settlement with your lender as it would possibly give you more and better options in your situation. For example, depending on what you have right now, you could pay a certain amount now with a more lenient method of paying off the rest of the debt.

    Another way would be a consolidation deal, where, for example, your highest-interest debt is put together with lower-interest monthly payments. Both plans could be your best option and release all the debt and pressure off your back.

It’s very important to stay on track and discipline yourself to stick to your plan. Facing debt can be daunting and never-ending, but with a determined attitude and following through with budget, payoff, or consolidation plans will bring you closer and closer to being debt-free.

Works Cited

  1. “5 Smart Ways to Manage Debt”, True Credit, 2018

  2. Image: IG @afternoon.culture