Some people struggle to get their heads around their finances even if they have good spending habits. When you feel like money is a foreign language, it is easy to start feeling like you have no control over it. Here are some tips to help you get to grips.
Take A Step Back
Start by sitting down with your bank statements from the last few months. Set aside some time to go through every transaction. Understand where your money is going daily. Make a list of every regular payment that you are making, including mortgage, rent, insurance, bills, debt repayments. List your subscriptions to streaming services. Look at the impulse and treat purchases. Be honest about whether these are costs that you can cut. Start planning your weekly spending by making meal plans and setting an amount for extra costs. Give up your car and using public transport to save on gas and insurance costs.
Look At Your Debts
Create a calendar for your debt repayments. Factor in the interest rate that you are paying every month. Avoid being caught out by setting money aside for these payments every month. Remember that late payments on debts will show up on your credit score. Look for ways that you can pay off small debts faster.
Don’t Rush Your Mortgage Application
Start budgeting as early as possible when you are buying a new property. Pay off as many existing debts as possible to improve your credit score. Prioritize stability in your financial and employment situation. Learn about the latest trends in the real estate market to avoid buying at a bad time. Look at a range of different home loans to see what interest rates and repayment schedules are out there. Use a how much home can I afford calculator to see what loan you should be applying for.
Start Saving For The Future
Find out what pension schemes your employer offers. Take advantage of any contribution matching on a scheme like a 401(k) and stay up to date with government changes. Research potential investments carefully. Talk to a financial advisor before investing in the stock market. Ask yourself if you have the time and energy to invest in volatile stocks or if it makes more sense to invest in slow and steady options. Spread your investment across a range of stock options instead of putting all your eggs in one basket.
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