Ducks In a Row? Learning To Prioritise Financially
Achieving money hygiene in your life is one of the most important life skills you can master. If your finances are not in order, you’re living paycheck to paycheck, servicing too many debts, not making savings and your money isn’t working hard for you, you’re storing up problems for the future. Your messy money matters will actively hold you back, stop you from achieving your goals and create a huge amount of stress in your life. And if you suffer a setback like getting seriously ill, it can spell disaster. So, setting financial goals, having a plan to pay down anything you owe and being able to plan for a rainy day makes sense on a lot of levels. It means freedom, and choices. But if you’ve never lived this way, where do you begin to turn it all around?
Meet Your Basic Needs
For many people, their money doesn’t work to meet their basic needs – by that, we’re talking physiological ones. Being able to keep shelter, and eat and drink – without relying on credit cards – is the first priority. Sort this out by learning how to plan a basic household budget. List down the cost of rent or mortgage payments, utility bills, food and drink and any non-negotiable outgoings like car payments. What is left is your disposable income – and if it’s not enough, you will need to look at ways to increase your income with a secondary stream of part time work or sales that will stabilise things.
Streamline Your Debts
Debt can be absolutely toxic and cause huge amounts of stress, so your next priority is to face what you owe head on, make any necessary adjustments and plan to pay them off as quickly as you can. It’s short term pain for long term gain. Money spent servicing a debt is money that is lost and isn’t working for you – and a commitment that takes away from your choices. Go through your outgoings and put them in order of what they are costing you. If you have a credit card with a high APR then concentrate on paying that off first, or moving the debt onto a card with a 0% introductory offer. Student loans to pay off? See if you can restructure your payments with www.refinancestudent.loan. Aim to make your repayments timely and affordable.
Set Some Financial Goals
Once you’re a bit clearer and no longer living hand to mouth, then you can get the next of your financial ducks in a row. Thinking about what you want to achieve in the next five years is a great place to start with financial goal setting. It could be buying a new car, putting down a deposit on your home or even just having a comfortable rainy day fund so that you can start your own business. The trick is to break that larger goal down into a series of incremental ones, with milestone targets along the way, and to make them affordable. When you see your money working harder for you it’s a really motivating factor.