How are your finances looking? If you’ve answered that positively, with a smile on your face and no sense of guilt, you are in the minority. About 80% of us have some form of debt if we include mortgages. 73% of American consumers will die with debt. We’re no longer leaving our families with money, property and a legacy. We’re leaving them with debts that any property will need to be sold to pay for. We’re leaving nothing, or worse, behind for our children.
A frightening number of us just don’t know. We are utterly clueless about the state of our finances. We avoid credit card bills, we rarely check our balances, and we hold our breath every time we pay for something with our cards.
Most of us, are not financially fit. We have debts. We don’t make enough to cover our expenses. Our credit scores are poor. We have no control over our finances, and things are steadily getting worse with no sign of improvement.
Stop. Right now. Stop burying your head in the sand and ignoring bills. Stop spending more than you can afford or borrowing at the drop of a hat. Make 2019 the year that you get financially fit.
Understand Your Finances
The first thing that you need to do if you want to get financially fit is to understand your current situation. Open all of those bills and statements. Check your balances and online accounts. Work out how much you are putting into the bank every month and how much you are paying out. If you’ve got debts, work out the totals and have a look at how much they cost you each month, and each year. The first step to change is understanding.
Build a Household Budget
Budget is a dull word. It makes you think of cutbacks and austerity. But, it’s an important word. Build a simple budgeting spreadsheet, including absolutely everything. Look at any cuts that you could make, and how much difference a few small changes make to your finances.
Make a Plan to Clear Debts
The thing with debt is, it’s easy to get in, and it’s easy to sink deeper and deeper. But, it’s much harder to climb back out. Credit is offered left right and center as soon as we become adults, and it’s easy to find yourself saying yes to one credit card “for emergencies.” Most of these first cards are maxed out within a few years.
It’s often unrealistic to think that you can pay off your debts just like that. But, you can make a start. Set up a direct debit for even slightly more than the minimum and you are on your way. Pay more off whenever you can afford to.
Think About Savings
Spending money can make you feel good. But, so can saving. Having control over your finances, confronting your issues and making plans for improvement is hard work. It’s ok to enjoy the feeling that comes with knowing that you are taking positive steps for a better future.