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4 Signs Your Finances Need a Clean-Up

When your house needs some attention, it is pretty obvious - your laundry baskets are full; the dishwasher needs to be unloaded, while a sink full of dirty dishes await the next load…time to get to work! It may not be as obvious to you when your personal finances need your attention. Here are some common signs of troubled budgets and how you can remedy the problem:


Making minimum payments on your credit cards

Credit cards can be helpful in establishing a credit profile – however, the way you handle your credit card debt can either help you or hurt you. Credit card debt is one of the worst kinds of debt you can have, and the longer you carry it, the more money you end up losing in interest. If you are not paying down your balances, or worse, adding to your debt every month, it’s time to get your debt under control. If you do not have the money to purchase something without blowing your budget, do not make the purchase! Yes, this will take some self-control, but the more you practice, the easier it becomes.


Barely making ends meet

Living paycheck to paycheck means you are barely meeting your financial obligations before running out of funds. Save yourself some stress and take a hard look at your monthly obligations to determine where you can cut costs and start saving. Even if it’s just a little each month, every dollar you save is more than what you were doing before. With this money, you can establish an emergency fund which will relieve stress and buy yourself some cushion for unexpected expenses. The goal is to save the equivalent to a three-month period of your earnings. Sometimes major sacrifices are necessary to help you jumpstart your financial health. Consider how much money could be saved or be used toward paying off debt if you downsize your apartment, don’t eat out as often, or going from a two-car household to one. While the sacrifices aren’t always comfortable, they will pay off in the long run.


You’re not saving for retirement

According to Northwestern Mutual’s 2018 study, 21% of Americans have not saved for their retirement. If you’re one of these people, it’s time to start. Your goal should be to save 15% or more of your monthly income for your retirement. If you’re not used to saving, going from 0 to 15% might be difficult. Start small and simply set aside $50 each month. Increase that amount when you get a raise or get a better handle on your expenses. Again, every dollar counts!


You don’t have a budget in place

When you have a budget in place, you will know where your money is going, if you are overspending, and where you can make changes. Remember that ‘sacrifice’ thing we discussed a couple paragraphs ago?

Many Americans don’t follow a budget, even though it’s probably the most effective way to manage money. If you are afraid of what a budget will reveal about your spending, then consider that fear a sign that you really need a budget!


Now dust off those dollars and cents and tidy up your personal finances. In the long run, this is the first step in achieving your financial goals.

By CAMPUS USA at 30 Jul 2018, 15:15 PM

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