Sun. Apr 21st, 2024

4 Ways to Stay on Top of Your Finances

Financial independence can feel impossible for many borrowers, renters, and debtors. Financial institutions do a great job of letting us spend our way into oblivion but often offer hollow advice when it comes to financial security, saving, and budgeting. Seeking out information on staying on top of your finances can seem like an uphill battle – but it doesn’t have to be. If you don’t know the difference between direct deposit and a paper check, or if you don’t know enough about tax returns to have a conversation about your IRS refund options with your tax preparer, read on to learn some tips for keeping a handle on your finances.

1. Balance your budget.

This sounds ludicrous. A balanced budget appears to be a necessity in the life of an adult with a job and bills to pay. However, many of us don’t actually run a tight ship when it comes to budgetary considerations. The average American carries about $6,200 in credit card debt. This means we routinely and consistently overspend. Because we use credit cards on purchases as if they were a debit account, it can be difficult to remedy the deficit we are running at any given point in time. Balancing your budget means taking that credit card (or four, if you fit within another statistic of the ‘average American’) out of your wallet and not using it again until the balance is paid down.

Financial institutions that issue credit cards often try to entice you to spend on the account, giving you cashback, travel points, or other incentives. These incentive programs are incredibly powerful for a narrow band of applicants and spenders – those who pay for purchases on their credit account and then pay down the entire balance each month – and a slippery slope for everyone else. Start by spending only on your checking account in order to take back control of your budget.

2. Consolidate debts with a bridge loan or balance transfer.

Because we carry so many different credit accounts around with us, it can be incredibly easy to rack up debts in multiple places. This means paying down minimum payments on a variety of different balances each month. Consolidating your debt footprint with a loan from a bridge loan lender Oregon or by taking advantage of a 0% balance transfer offer from one of your current lenders is a great way to tackle these debts all at once. Bringing all of your debt under one roof, so to speak, means that you only owe payments once a month, and on one loan balance. The minimum payment on this single line of credit is often far lower than the added total of each distinct balance on different accounts, meaning you can pay down the balance much faster, or keep extra cash in your pocket each month to help with bills or savings goals.

3. Start saving now.

Most Americans don’t save. 70% don’t have $1,000 stored away to cover unexpected expenses or emergencies. In order to really take control of your finances, you must begin to save, now. Putting away a few dollars a week or a predetermined percentage as a part of your budgeting considerations each month is a great way to get started. Similarly, many banks now allow for an automatic roundup on each card transaction you make. The difference is transferred automatically to your savings account. The money here can really add up and every penny brings you closer to financial freedom.

4. Tackle your taxes like a pro.

Tax season arrives every year like clockwork. There is no escaping the taxman, but fortunately, many Americans are able to take advantage of major deductions throughout their habits and routines and secure a large tax refund. Filing your taxes with the help of a professional software platform like TurboTax or a tax preparer firm is often the fastest way to get tax refund checks deposited straight into your bank account on a yearly basis. Take tax season seriously in order to bring back a sizable influx of cash into your account each spring in the form of an IRS refund.

Taking control of your finances means making sacrifices in the short term, but the freedom presented by a healthy cash flow is worth it. Take the time to care for yourself and your different accounts.