Monday, April 3, 2017

Keep Fit (For Your Finances)

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Getting (and keeping) your finances in shape is almost as important as ensuring that your body is fit and healthy – both will allow you to live a long and happy life. Of course, neither one is easy, but at least you know where to start when it comes to taking proper care of your body, but what do you to keep your finances fit?

If you want to come out of the red and stay in the black, there are many things you can do – it just takes some time and dedication to get started. Check out these basic steps to sorting out your finances and begin the process of freeing yourself from financial strains right now:

Take an Honest Look

There is absolutely no point in lying to yourself (or your spouse) about the state of your finances if you want to get financially fit. So, the first step of your new ‘fitness’ regime should be sitting down and working out how much money you have, what you owe and how much you need each month to survive. You can take things from there, knowing that you are on the path to a healthier bank balance and a better way of managing your money.

Draw Up a Budget
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Drawing up a realistic budget will stop you from failing. It’s like building up your stamina in the gym slowly instead of running a marathon on day one. You can read more about setting and sticking to a realistic budget here, but basically, you write down how much your monthly fixed costs like rent/mortgage and utility bills will set you back., along with any other expenditures and set a cost limit for the month that you should aim not to exceed.

Start a Spending Spreadsheet

In order to help you keep on top of your spending, and alert you if you should start to stray from your budget, it is never a bad idea to start up a spending spreadsheet. Every time you make a purchase, either get a receipt, or note it down, and add it to your spreadsheet at the end of the day. Very quickly, you’ll  start to recognise spending patterns that aren’t serving you well, and this will help you to work out where to trim the fat.

Have Three Bank Accounts

Sometimes, we spend money just because it’s there and because we can, and sometimes we spend more than we intend to without realising it. One of the best ways to get around this is to open up three separate bank accounts. First, you will need a current account in which your salary can be deposited and which can be used to pay all of the bills. Second, open an account which you can deposit your ‘spare’ money into. This is the money that you can use to spend on night’s out, beauty products and whatever else it is you require to get through the month. Finally, you should open a savings account and aim to pay more into this account that your spending account, when you are able.

Start an Emergency Fund
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Life is full of little emergencies, which although not too serious can pose a problem to our finances. That’s why it’s always useful to set up an emergency fund, which can be dipped into if the dog gets sick, the washing machine breaks down, or there are a lot of birthdays in the family one month.

Transfer Your Balance

If you’re currently paying off credit card debt, and you’re being charged interest on those cards, it is certainly worth looking for any interest-free offers that might be available to you. There are many credit cards which will offer you an interest-free deal for as many as three years, which means you could clear your current credit debts without paying a cent more in interest. Just be aware that there is normally a small fee for transferring a balance (it’ll be much smaller than the interest you’d otherwise pay over three years) and take this into account before you do any transfers.

Call a Credit Repair Service
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If you’ve had trouble paying back your debts in the past, it could mean that your credit score isn’t the best, which means that you might have to pay more for credit, in the event you need it, in the future, and  although I wouldn’t advocate getting into debt, a bad credit score can affect important stuff like the ability to get a mortgage, so it is important that you take control of this. Lexington Law is one of the US’s best credit repair services, and it could be worth talking to them if you’re worried about the future effects of your credit score. You can read more about Lexington Law if you want to see the benefits of such a service, just bear in mind that talking to a credit repair service will be noted on your credit file, so you need to think carefully about your options before proceeding.

Maintenance

When you lose weight, you have to start a maintenance plan to ensure that you keep those extra pounds off and the same is true with finances. Once you’ve got your financial matters into a fit state, you need to work hard to keep them that way, which means that you should check your spending spreadsheet at least once a week and be willing to reign in your spending if things are spiralling again. You might also want to steadily increase the amount of money you use to pay off any outstanding debts and then put into savings, as things improve. This will put you in good stead for the future and ensure you never have to worry unduly about your finances again.

Reward Yourself
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Of course, keeping your finances fit doesn’t always have to be a drag. You work hard for your money, and you should be able to enjoy it at least some of the time. So, once you’ve got things under control, you can think about giving yourself a few little treats. Incorporate them into your monthly budget and don’t go crazy and you’ll always have a healthy bank balance.