5 Everyday Practices That Will Help You Better Manage Your Finances

One lesson to learn from the Coronavirus pandemic is the importance of having an emergency fund. The onset of this pandemic saw many people enter into a panic mode after losing their jobs and sources of income.

The cases of depression and hopelessness have since heightened ,as people work towards re-establishing themselves. The truth is those highly affected are people who did not have an emergency fund. It takes great sacrifice and discipline to set aside some money for unknown emergencies.

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Though a bitter pill to swallow, the fruits of financial discipline are peace of mind when you have an emergency. Implementing these five everyday practices can help you stay on top of your finances with ease.

Be a Minimalist

As you can already tell, the challenging economic times going on in the world today are having a significant toll on people’s mental health. Consequently, it’s not yet clear when or if things will ever normalize, so take good care of the finances you can control.

One of the surest ways to do this is to embrace a minimalist lifestyle that entails a careful examination of situations and opting for the least expensive option. A minimalist will, for example, opt for bail bonds instead of wasting their finances paying for cash bonds. Consult with an attorney regarding all legal issues.

A minimalist derives in simplicity, and top priority needs to cut unnecessary costs. This is a must-have trait for anyone wishing to have a healthy financial life.

Get Out of Debt

Impossible, you think? The truth is it’s possible to survive without debt, but overcoming a debt situation takes hard work and self-discipline. The first step to staying away from debt entails coming up with a budget and sticking to it. Next, you need to have a clear outline of your income and connect your earnings with your spending.

Establish a plan to guide you on repaying your current debt. Chances are you may wish to postpone this, but kindly resist this urge for your peace of mind. Sleeping on debt is a gateway to poverty and untold sufferings. Besides the interest rates that increase daily, it affects your credit score, making it hard for you to get funding.

Do everything within your power to repay your current debt and avoid new ones.

Have a Long Term Financial Goal

Saving for a long term financial goal such as purchasing a house or car will prevent you from misusing your money. These goals will motivate you to work hard and achieve the impossible. Although a viable idea, it’s not always easy to set and follow a long-term financial plan.

Most people are always trying to push this idea to a later date, claiming that the current financial needs do not accommodate it. If you are among this group, change your mindset- there is never a perfect time to start saving for your future.

The lame excuses will only waste your time, leaving you with nothing to show at the end of the day. It would help if you started with the little you have, instead of wasting it on unproductive activities.

Be Careful With Your Credit Cards

Though an essential credit builder, your credit card could see you sink into more debt as they tempt you to borrow more than you can afford to pay. Moreover, they increase your chances of missing a payment, affecting your credit score and accrue late fees.

 

You, therefore, need to practice ultimate care when using your credit cards and always ensure to automate your payments or set monthly reminders to avoid missing out on deadlines. Also, avoid applying for too many credit cards as each application results in a hard inquiry, which negatively affects your credit score.

Track Your Spending

The secret to achieving healthy financial management is the ability to account for every single dollar. There are many ways of spending money today, increasing the risk of wasting your finances if you are not careful.

There are various ways of tracking your expenditure, such as using apps, for instance, Mint.com, recording on a piece of paper, and using different bank accounts. Whatever option you decide to go with, ensure it answers your money questions and helps locate every single coin.

The goal of tracking your expenditure is to ensure it doesn’t surpass your budget. Therefore be on the lookout and make timely adjustments when your spending gets out of control.

Stay with it

You hold the key to your financial freedom. The truth is it’s not how hard you work in to generate income, but how careful you are in spending it. Stay in control of your finances using the above five tips.

 

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Good luck!

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

(email) ken@stltest.net

(website and blog) https://www.accountingaccidentally.com/