Financial stability has been a struggle for millions of people in the United States. Especially as the economic and health crisis rages on, the idea of building for the future may seem like a far-off distant dream. But you can do it. Working toward a better, stronger, and secure financial future is an attainable and realistic goal.
To take control of your financial destiny, follow these steps:
Make a Plan
Begin by assessing your entire budget, including your monthly income and expenses. If you don’t have much money to set aside each month towards savings, you may need to reevaluate what you’re spending your money on. Do you really need that extra streaming channel? Can you limit eating out or slim down on your entertainment expenses? These simple steps can go a long way and may allow you to be more creative with how you spend your pastime. You may also want to limit credit card use, especially if you’re in debt. Using cash or a debit card can help you limit what you’re putting on credit cards.
It’s important to note that if any financial hardship you’re experiencing has been caused by the pandemic, there’s a number of federal programs that can help. For the many people who are behind on their mortgage payments, the CARES Act temporarily protects you from losing your home to foreclosure and entitles you to a hardship forbearance. If you’re struggling with other financial hardships, there are a variety of unemployment programs that have been extended until September and income tax waivers that will reduce the amount of taxes owed from 2020. You may also want to look into state assistance programs to help you regain pre-COVID stability.
Pay Off Debt
While it may seem overwhelming, if you have accrued debt, working toward paying it off can help you begin building that better future. Experts advise paying high-interest loans off first, especially if you have credit card debt. There are several tactics you can take when paying off loans, including the debt snowball, debt avalanche, and making an appointment with a credit counselor to learn more about getting on a debt management program, which can help you pay off your debt in three to five years at an affordable monthly rate. Paying off debt will boost your credit score, and best of all, free up funds for you to apply to savings.
Put it in the Bank
Experts advise that if you can, starting an emergency fund that is easily accessible is a good way to make sure you’re financially protected when times are hard. If you’re able to pay your regular household bills and your debt is under control, depositing stimulus or tax money toward a savings account will help build financial security. The same holds true for retirement planning, which plays a major role in your overall financial future. If you haven’t, choose a retirement plan so that you can begin saving money and earning interest.
Financially Educate Yourself
This means broadening your knowledge of finances, handling credit, and debt management knowledge. Whether it’s fully understanding the ins and outs of credit cards or how to set a budget, gaining a better understanding will help you make better decisions surrounding your financial health and well-being. Credit counseling agencies often offer workshops to help people better understand how to manage their finances and make more informed decisions.
It may take some work to get there, but building your financial future is an endeavor that everyone should embrace, so you can live without constant anxiety related to money issues while focusing on the important things in life.