Right now is a critical time in many people’s lives – some people have lost jobs, others have lost homes – for everyone managing finances is more important than ever.
According to the Retirement Confidence Survey by the Employee Benefit Research Institute, 60 percent of workers reported the level of debt they currently have is a problem, with 19 percent of them saying it’s a significant problem.
With so much of the workforce worried about debt, how will they be able to retire and open up jobs for the incoming graduates?
If you are worried about money management, keep reading this guide to learn more about managing your finances and how it can help get you on the right track.
1. Develop a Budget
Having a budget is vital because it can hold you accountable for your spending habits.
According to a study from debt.com, in 2019, fewer Americans followed a budget from the previous year.
Sometimes it’s too easy to swipe the credit card and call it a day, but that is how bad money habits develop. Instead, consider using a prepaid bank card to help limit your purchases. It’s important to review your choices to make sure you get the best option for you.
Using a prepaid bank card will allow you to track your purchases without digging deeper into debt.
2. Limit Credit Card Purchases
Overspending on credit cards can get you in a heap of trouble with interest rates and late fees. To avoid racking up debt, limit the purchases you put on your credit card, or be sure to pay it right off afterward.
Over 189 million Americans have a credit card, and for each household that has a credit card, the average amount of debt they owe is $8,398.
This number is expected to grow with high levels of unemployment currently hitting the economy. If you are one of the 189 million, consider evaluating your spending habits and see where you might be able to cut back.
3. Save Early, Save Often
If you are serious about saving money, saving as much as possible early on will help you tremendously when it comes to retirement.
Saving money is only half the battle. The other half is investing and growing your money.
When investing your money, you are creating a sort of “finance magic” called compound interest. Compound interest occurs when you start earning interest-on-interest, or interest earned on your initial investment as well as interest in the form of dividends.
4. Pick up a Side Hustle
Side hustles have become incredibly popular in the last few years with the increased use of ridesharing and food delivery services.
With the minimum wage rate barely increasing when compared to the cost of living, many people are forced to take up a second job to make ends meet.
Popular side hustles include:
- Ridesharing (Uber, Lyft)
- Food delivery (Instacart, Doordash, Uber eats)
These jobs can help supplement income and get you back on your feet while you pay down debt.
5. Negotiate Bills
Anywhere you can save money is a victory when you’re in debt. Believe it or not, many bills are negotiable, but they won’t be advertising it.
You can call the companies and ask, or services like Trim can help negotiate for you and get you a lower rate.
Interested in Learning More About Managing Finances?
These five tips will help get you started on your journey towards financial freedom. Managing finances begins with you, and there isn’t going to be a better time to start than today – so get out there and start saving!
For more information on personal finance and saving money, check out the rest of our blog!