It might seem impossible when dealing with debt, but you can achieve a debt-free life with the right budgeting tips and strategies.
No one willingly wants to be in debt. It adds unnecessary stress to your already demanding life and it costs money you could be spending elsewhere.
Money management is a key skill everyone should have, as it teaches you how to budget, save, invest, and of course, spend money responsibly. This is the main determining factor of who stays rich and who falls into debt.
Getting out of debt and staying out of it is something you can do yourself. To help you get started on your journey, we’ve highlighted a few important tips you can implement to help you save money and stay on top of your finances.
Keep Track of Your Expenses
Every household has regular expenses that must be paid every month.
A great way to control your spending and avoid taking on debt is to track your expenses by regularly recording what you buy. Take a sample month, preferably the previous month, and highlight the things you spent money on. Make sure to leave nothing out and record exact values.
Once done, group them into categories such as groceries, taxes, insurance, and personal pleasures. Non-essential expenses can be hard to cut out, but it’s an important step to take if you’re on the verge of falling into debt.
Set Up An Emergency Fund
An emergency fund is like a personal safety net. This is money you can dip into when your monthly budget falls short.
This will be something to cover your expenses if something unexpected happens. For example, if you lose your job, have an injury that prevents you from working, or other necessary costs arises. It’s better than using credit cards as there is no interest attached to it. Since it’s a specifically designed fund, you can avoid depleting your savings.
A general rule of thumb is to have three months’ worth of regular expenses in your emergency fund, though you don’t need to fund it all at once. You can build your way up in small steps.
Focus on Your Credit Card Debt
The best way to keep your spending under check is to pay your credit card balance as you go.
A credit card certainly makes things easier such as renting a car, travelling, or making hotel reservations. While building a credit score and gathering reward points is a plus, if you can’t afford to pay off the credit card then don’t make the purchase.
Putting off paying your credit bill can cause even more debt to accumulate, as the interest rate will get higher the more you wait.
Regain Control of Your Finances With Lazard and Associates
Struggling to stay out of debt while trying to manage your monthly expenses can be tough to juggle alone.
Our experts at Lazard and Associates are here for you. We’ll develop a management plan that includes a budget you can stick to while making reasonable payments toward your debt. This plan will be tailored to your unique situation. This way, you can still take care of your expenses while reducing your debt over time.
Get in touch with us to learn more about our credit counselling services and book your consultation today.