Did you know that 160 million Americans have credit cards? What does that say about credit card debt? The numbers must be staggering. If you find yourself struggling with debt, or even finances in general, it is normal to feel overwhelmed. Believe it or not, there are some very simple ways to manage your finances with and perhaps even build your bank account back up. Let’s start with some ideas that begin at the bank, and work our way into tips for everyday life!
- Open a line of credit
If you apply for and are approved on a line of credit with your bank, open it. The interest rate on a line of credit is usually much lower than your average credit card. After you open your line of credit, instead of using it like a credit card, transfer your preexisting credit card debt onto it. Not only will you pay off your credit cards, but you will have all your debt organized to create one single total that you can make payments towards monthly at a low interest rate.
- Get rid of your credit cards
After transferring your debt to your new line of credit, get rid of your credit cards. You can go as far as to close your accounts and cut up the physical cards, or you can make a very conscious effort to leave them in a safe place. Not having your credit cards on hand will stop the temptation to spend.
Make an appointment with a financial advisor at your bank to see what you can invest your money into. Low-risk mutual funds are a great way to begin. There is usually a minimum amount required for initial investment, but find one that works for you.
- Be well prepared for tax season
Do your research and know what types of claims you are eligible for. Make sure to have health insurance, as you can be charged a tax penalty if you are without insurance for more than three months out of the year. If you haven’t purchased health insurance you can use the obamacare tax penalty calculator to find out how much your penalty will be. This can help give you an estimated idea of what to expect come tax time.
- Build your savings accounts
Set up pre-authorized payments to transfer money from your paycheck to a savings account bi-weekly, or however often you get paid. More often than not, you won’t even realize the money is coming off of your check. What a great surprise it will be when you have enough for the trip you’ve wanted to go on!
- Set a weekly budget
Setting a weekly budget can be grueling, but it works. Write down and add how much money you spend per day on food and beverages, transportation, parking, entertainment, and any other costs you may have. Multiply the total number by seven, and there you go—weekly budget. If the number seems incessantly high, see what you can cut down on. Revise your budget, and make note of it somewhere—perhaps in your phone, where you can see it. Try your best to stick to your budget!
- Lower the amount of money you spend on food
One in 10 Americans spend more than $300 per week on food. Do you fit into that category? Do your best to buy discount or bulk groceries, and prepare meals or snacks at home. Imagine the savings!
- Lower the amount of money you spend on entertainment
Do you find yourself spending too much money on books? Nights out at the movies? Unloading the contents of your wallet at the bar? Find more cost effective ways to stay entertained. Libraries are up to date with literature, streaming services can offer unlimited movies at a set price, and buying liquor for a night in with friends is much cheaper than a 200% markup on a bottle at the night club!
- Stop confiding to others
While it may seem tempting to vent about your debt to your best friend, or brag about your last paycheck to your family, don’t. No one should be aware of your financial situation except for you and your financial advisor (and in some cases, your partner.) When you are the only one who knows your situation, you are the only one who can control it. People will be much less likely to ask for favors if they don’t know how much money is in your bank account.
- Think twice
Whether you’re at the mall or the grocery store, think twice before picking up that t-shirt or organic snack mix you feel compelled to purchase. Sometimes, waiting can do you good. Wait for a sale, or just let time pass—you’ll forget about the item soon enough.
- Make gifts instead of buying them
Gift giving can become pricey. At some point in time, you’ll be required to give a gift to family members, friends, and even coworkers. Think of something thoughtful, peruse the Internet for ideas, and make gifts instead of buying them. Sometimes, gadgets and knick-knacks end up tucked away in someone’s closet, anyways.
- Don’t be afraid to say no
The most important way to manage your finances is being able to speak your mind—in this case, not being afraid to say no! Whether you’re saying no to a pricey weekend getaway or an expensive restaurant, remember that it’s okay to decline the invitation.
Finances are very important. By following these 12 simple steps, it’s almost guaranteed you’ll find yourself with more money than you thought you had!