Healthy Finances in the New Year

COVID-19 took a toll on many families in 2020. The lockdowns caused people to lose their jobs and change their way of life. However, with new vaccines in sight, brighter days are ahead. If you are experiencing difficult financial times, there are several ways to speed up the recovery.

Drowning in Debt

When you have excessive amounts of debt you could end up living paycheck to paycheck. You might feel like every time you check the mail there’s another bill due. Thankfully, you can reduce your debt so that you’ll have more money to live and enjoy life.

If your debt is mostly credit cards, you have a few options for eliminating it. You can choose one card and start paying the balance off slowly. Some people start with the card that has the highest interest rate, others do the card with the lowest balance. Either way is fine. 

If you want to keep your cards, think about using a credit union versus a traditional bank. It’s beneficial because credit union loans offer low interest rates. 

Cutting Back on Unnecessary Purchases

When you have limited funds, it’s essential to reel in frivolous spending. The short-term refrain from buying unnecessary items will produce positive results. The needs are a roof over your head, food on the table and a means to get back and forth to work. Unfortunately, the wants will have to wait. If you cannot browse without buying, only go to a store when you need something. 

Learning to Use Credit Cards Properly

If used correctly, credit cards will raise your credit score and provide perks. Some will give you free airline miles, while others offer cash back on purchases. Credit cards should not be something you rely on to get through each month. Unfortunately, 2020 caused many people to use them this way. In the future, it’s important to eliminate using them for daily expenses.

Importance of the Household Budget

The household budget is a valuable tool that works for you financially. You set both long-term and short-term goals and manage money wisely. Without a budget, if you receive a windfall of cash, you might immediately find ways to spend it. 

On the other hand, someone who uses a budget takes that money and divides it, putting some into their vacation and emergency fund, paying down debt and putting the balance into their retirement savings. By doing this they are providing a quality of life that enhances their level of comfort. They have money to enjoy life and spend quality time as a family. 

The good news is creating a household budget is easy. However, if you don’t stick to it, you won’t achieve positive results. There are several free apps and free spreadsheets online. If you prefer you can always do it the old-fashioned way, with a pen and blank sheet of paper. List all of your monthly expenses adding in taxes and other bills that come due only once or twice a year. Then deduct that figure from your net income. The money left over you can use to reduce debt and contribute to specific savings. 

The Emergency Fund

A good portion of working Americans have no savings. Unfortunately, things will happen that require money to fix them. Without a fund for emergencies, you end up borrowing bill money. This can create turmoil regarding your finances causing late or missed payments. Luckily, you can avoid this scenario by establishing a savings account. Start out small, allocating a small sum from each paycheck. As your debt decreases or your income increases, you can contribute more. The goal is to have enough money to cover three to six months’ worth of expenses.

Wise Money Management

People in all income brackets encounter difficulty with their finances because of mismanagement of money. If you keep increasing your debt, you’re never going to be comfortable financially. The key to success is to live below your means. Otherwise, every penny you bring in you’ll need to cover your bills.

The year 2020 is behind you. Use the new year to get back on track regarding your finances and achieve financial wealth.  

 

LisaLisa

Welcome to the Night Helper Blog. The Night Helper Blog was created in 2008. Since then we have been blessed to partner with many well-known Brands like Best Buy, Fisher Price, Toys "R" US., Hasbro, Disney, Teleflora, ClearCorrect, Radio Shack, VTech, KIA Motor, MAZDA and many other great brands. We have three awesome children, plus four adorable very active grandkids. From time to time they too are contributors to the Night Helper Blog. We enjoy reading, listening to music, entertaining, travel, movies, and of course blogging.

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