“Even though you took a resolution to manage your finances in a controlled way on the New Year Eve, you are not completely content with your financial condition for one reason or another. Well, now is the high time you tightened your belts,” said Sandra, the financial consultant of an Institution.
Sandra mentions here a real story of a borrower, Sharon, who decided to cut down on her spending to settle her personal loan. Much as she tried all the harder to stick to her resolution, she found little improvement that was unfortunately not enough to get rid of the debt.
Sandra emphasizes on creating a budget, but most of the borrowers fail to stay within the budget. Perhaps most of them think that budgeting is jotting down expenses only. She explains how you can brush up your finances for the next month.
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Cut back on subscriptions
Like others, Sharon also prepared a list of all of her expenses to figure out where she could whittle down. Despite following the budget, she failed to take full control over her spending. Financial budgeting is not as easy as you think. You need to keep tabs on your every move. Several expenses arise throughout the month that fall through the cracks – subscription is one of them.
You subscribe to several free-trial offers without realizing that they will cause you money as the trial period expires. If subscriptions are not crucial, cancel them and save your money.
Build an emergency cushion
One of the biggest mistakes of borrowers is they do not set aside the part of the money that they would dissipate on non-essential expenses. Start saving money from the first day. The sooner you put aside, the sooner your emergency cushion builds up. Sharon committed the same mistake. In March, you should be careful with your savings.
However, your goal is not only building your savings account but also deciding on the right time to use it to cushion the blow. If you have saved money worth of your three months salary, you should not take out a short-term loan to meet unexpected expenditure. If the reverse is the reality, make sure that you will not be strapped after applying for the loan.
Adhere to your saving goal
If you do not want to embroil yourself into painful debt, you must have some money set aside. You know that you should maintain your saving goal but most of you do not try to stick to your goal. The same situation Sharon faced. She liked setting aside a small chunk of money in the beginning, but her temptations and wanderlust wreaked havoc on her finances.
If you want to have stable finances, your priority must be saving money. The more money you secure, the more financially stable you are. Of course, it will be too ambitious to expect saving up for buying a new house, but you can avoid taking out loans for your short-term needs.
Get best interest rates
Interest will add up the balance of your savings account. However, this will not be enough if you want to achieve your goal faster. You should look for other deals on the market. Some financial institutions provide a savings scheme at better interest rates. Contact your bank if you can get the best deal.
Consult a financial advisor
If you think you need financial assistance and you are not able to decide on various options available to you, do not hesitate to consult a financial advisor . The advisor’s suggestions will be based on your income and financial goals. If you let them know a clear picture, you will get the best deal.
Once you have developed the habit of saving money, you will start doing it on autopilot. To ensure you are on the right way, monitor your monthly expenditure. As long as they are within your budget, you will not fall short of money at once. However, your financial situation does not need to be set in stone. You can change it as your circumstance evolves.
Alex is fascinated with “understanding” people. It’s actually what drives everything he does. He believes in a thoughtful exploration of how you shape your thoughts, experience of the world.