Many people encountered difficult financial times in 2020. The pandemic caught them off guard. When you live paycheck to paycheck any unexpected expense can cause financial ruin. If you’re ready to grow wealth in 2021 here are several tips to help you achieve it.
Budget, Budget, Budget
Last year might have totally thrown your plans through a loop. Things are starting to look up, though. You’ve heard the word “budget” before but passed up on the opportunity. Maybe because you misunderstand what one actually does. Initially, it may be difficult to stick to. However, once you adapt to it, you’ll wonder why you waited so long.
A budget is simple to create. You can use a sheet of paper or go online and print out a free spreadsheet. Using one or the other, list all your monthly expenses, remembering to include things like school tuition and taxes, that come due only once or twice a year.
An Eye-Opener
A budget gives you a clear view of what you owe out and to whom. Use this information to track and curb spending, reduce debt and achieve goals now and in the future. It forces you to save money so you can enjoy the comforts of life.
Saving Money on Repairs
Using your budget, you constantly find new ways to save money. For home repairs, you might think to yourself, “I need to find a qualified licensed handyman near me that offers the best rates.”
To find them, search for people in your area on the yellow pages or through social media forums. Make sure the person you choose has a good record with your state and that they’re licensed and insured. Hiring someone without proper credentials could cause you to have to spend more money later.
Living Beyond Your Means
Only a small percentage of the population uses credit cards to their advantage. Most people use them to buy things they otherwise can’t afford. If you think about it, how is adding another bill to the pile helping you financially? The answer is simple, it’s not. If you can’t afford something, you don’t buy it. That also applies to buying a home. Even when approved by a lender, you must take a minute to factor in all the additional expenses that come with homeownership. Living within your means provides a better quality of life.
Reducing Debt
Having a large amount of debt from various places can prevent you from living. If you make a good salary, you might be seeing every penny you bring in is going toward the payment of your bills. Fortunately, there are ways to reduce it.
First, stop frivolous spending as this only results in more debt. Applying for a credit card that offers balance transfer, interest-free will allow you to pay off existing credit cards faster. If you’re unable to pay the minimum balance on your cards, consolidating the debt using a consolidation loan may provide a better option.
Establishing Savings
Events will happen unexpectedly that require cash to resolve. Having a savings account for financial emergencies will allow you to maintain your budget. Start small, depositing 10 to 20 dollars each pay period, and as you reduce your debt, add more to the fund.
Contributing to Retirement
Retirement is not as far away as it may seem. Before you know it, you’re only a couple of years shy and no savings to enjoy it. The best time to plan for your retirement is while you’re young and gainfully employed. Many companies include optional entry into a 401(k) as part of their benefits package. If this is the case for you, contribute the maximum amount allowed. With 20-plus years until you retire, you’ll end up with a sizable nest egg for your golden years.
While 2020 is behind, the takeaway is to get your finances in order and grow wealth to prevent getting caught off guard. Use the past year’s experience to inspire positive changes in your life.