With the global financial crash a vivid memory and the repercussions still being felt across the globe, hopefully one of your resolutions was to get your finances in order and start saving for a more secure tomorrow, because if the pensions and retirement saving crises have taught us anything, it’s that we really do need to start safeguarding our financial futures. Follow our guide to getting on top of your money woes and investing your money wisely so you can make your money go further.
Pay Off Your Debts
Why pay interest on debts when you can get debt free and invest your money in stocks and other securities? The first thing you need to do when assessing and tackling your debt is to be honest with yourself. Don’t hold back and don’t think that a certain store card doesn’t count because you only pay a few pounds or dollars on it every month – the longer you take to pay off a debt the more it will cost you in the long run, so don’t be shortsighted.
Once you have all your debts laid out in front of you, you can then choose to either pay off the one with the lowest balance (which might appeal as you’ll be able to pay it off quickly making you feel that your hard work is paying off), or the most expensive one (i.e the one that charges the highest rate of interest), as the more money you’re spending on interest, the less you are paying off your actual balances. Once you know the amount of money you owe you need to calculate how much you can realistically afford to pay off each month and stick to it. One good idea is to divide your income into separate bank accounts: one for household bills, one for debts and one for disposable income so you know how much you have to spend and you’re not tempted to start dipping into the wrong fund.
Set Up a Saving Plan
According to a worrying survey carried out by Bankrate.com, fewer than one in four Americans have enough money to cover themselves for six months should they find themselves out of work or on the wrong end of another crisis. The survey also found that as many as 76% of Americans are living paycheck to paycheck. Don’t become another statistic; set up a savings account and start looking at ways of cutting your monthly outgoings so you have something to fall back on should the worse happen.
Think ahead and take advantage of the January Effect, which sees stocks and share prices increase in January more than other months. From now until then watch the stock market, choose some wise investments and buy up before the end of the year and then cash in in January. Play the game right and this time next year you could be getting your financial new year off to a very good start.
Are You Paying Too Much?
Look at your bills and see where you can make some cuts to your spending. Do you really need a cellphone, house phone and broadband? Perhaps you do, but check your current offer and compare to others on the market to see if there is a better one out there for you. Similarly, if you have a car then there’s no escaping the fact that you need insurance but have you looked around at different motor cover deals to make sure you’re not paying over the odds? You really need to ensure you do this every year to guarantee you don’t miss out on any new deals, so when your renewal is up be sure to shop around – think of it as a budget spring clean. You can also apply the same methodology to your home insurance and health and travel insurances – you’ll be surprised at how much money you can save every year.
Are You Owed Money?
The US federal government is sitting on around $18 billion of unclaimed money. Are you in line for a tax refund but haven’t chased it up? Maybe you’re owed pension money from a former employer of perhaps you’re due a FHA-insurance fund? There is no short solution to searching for unclaimed money but a good starting point is the US Department of Treasury, and remember, no matter how arduous it may seem in the short-term, in the long-term it’s only fair you have what’s rightly yours.
Are you ready to get out of debt?
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