Debt can be manageable if you take the proper steps. Managing debt and creating wealth starts with budgeting, tracking expenses, and eliminating unnecessary spending.
Using a budget can help you determine how much money you have for debt payments, savings, and other monthly expenses. Having separate budgets for personal and business expenses is essential, too.
Make a Budget
If you want to be free of debt, the first step is to create a budget. Write down your financial goals — research shows that doing so makes you 42% more likely to achieve them.
Once you have your budget, making the most of it is essential. This means allocating enough money to pay your debt payments, emergency funds, and retirement contributions while having a reasonable amount left over for fun.
The easiest way is to set up automatic payments with your bank. This will ensure that you always make on-time repayments, which can help your credit score and save you money in the long run. If you’re paying more than the minimum, this will also accelerate your loan’s payoff timeline.
Pay More than the Minimum
Debt consolidation offered by Symple Lending can help you get a handle on your finances by combining your credit card balances into one monthly payment at a lower interest rate. In some cases, you can even see a reduction in overall credit utilization, which can positively impact your credit score.
Start by tracking your credit cards and income to understand your situation. Collect pay stubs, or use an online budgeting tool to get an idea of your typical monthly take-home salary and bills.
Determine your monthly payments and work to pay more than the minimum. Then, put any extra money toward the debt with the lowest balance, and continue working until you’ve paid off all your debt. Doing this will make you see your progress much faster and motivate you to keep going.
Set Up Automatic Payments
If you struggle with multiple credit cards and loans, consolidating them into one payment can simplify your finances. It’s essential to stay on top of your payments, though.
If your bank account balance needs to be higher on the day your automatic bill payment withdraws, you can pay overdraft fees. If you set up an alert on your phone, app, or online banking, you’ll be notified if your account goes below a certain threshold.
Consider setting up an automatic transfer to savings with each paycheck to achieve financial goals. You can use this for a down payment on a house, vacation savings, and more. It’s a great way to build up your emergency fund and learn better money management habits.
Make Your Payments on Time
Several things can cause you to stay caught up on your bills. It can feel overwhelming, whether an unexpected expense or a change in your income. Fortunately, there are steps you can take to catch up on your payments and avoid costly late fees and interest charges. You can also talk to a knowledgeable associate at Symple Lending to learn more about debt consolidation.
To start, make a list of all the debts that you need to pay. Order them by importance and prioritize your repayment efforts on those that carry the highest interest rates or costs. Then, look for ways to reduce unnecessary spending, such as canceling a gym membership or streaming service subscription. Lastly, apply extra money in your budget to your monthly credit card payment. This can help you pay off your debt faster and save on interest.
Create a Savings Account
A savings account is a service offered by banks and credit unions that gives you a safe place to store money while earning compounding interest. It’s common to see savings accounts linked to checking accounts so that you can easily withdraw funds. Some banks or credit unions limit withdrawals/transfers to six/month, but online options have no such restrictions.
Select an institution that keeps fees low and offers competitive rates when looking for a savings account. Consider an FDIC- or NCUA-insured account for added peace of mind. Financial advisors suggest saving three to six months of expenses for emergencies. Getting into the habit of saving early can help you build that fund faster.