Summer is a great time to take charge of your finances. Increasing financial stability is a common resolution that people make, but it can be difficult to accomplish if you do not change your financial habits.
Here are some financial tips that you should consider adopting this summer to increase your financial security and help you build wealth.
Set Aside Savings First
Many people are content to save what they can at the end of the month after all of their spending has been done. This frequently results in very little to nothing being saved for the future. By changing this habit and saving for yourself first, you will find that more money is saved, and the balance of your savings account will increase quickly.
Try to save at least 10% of your income in an interest-bearing savings account. If your employer allows direct deposit, have the savings percentage automatically deposited into your savings account.
Commit to a Spending Budget
Reducing your spending is one of the best ways to increase the amount that you have available for saving. Sit down and create a reasonable budget that takes into account your monthly expenses, your necessary discretionary spending, and sets aside a specific amount for saving.
Once this budget is completed, commit to sticking to it as closely as possible. This will help you control your spending, ensuring you don’t waste money and allowing you to save more for future needs.
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Pay Off Your Debts
Carrying debt only ensures that you are paying the creditor additional money that could be better used buying the things that you need or saving for your future. Make a plan to pay off your debt as quickly as possible so that you can stop paying interest to your creditors.
It may take a considerable sacrifice, such as foregoing vacations for the year or restricting your purchases of new clothing, but you will be much happier and substantially more financially secure if you eliminate these debts from your life.
Create an Emergency Fund
Unexpected financial emergencies can occur at any time, and this year might be the year when one strikes for you. If you do not already have an emergency fund with at least three months of expenses in it, commit to creating one this summer.
A credit card should not be used as emergency funding because you may have difficulty paying off the balance in a reasonable time period, leading to hundreds of dollars in additional interest payments made to the credit card company.
Leave the money in the emergency fund alone, except for true emergencies, such as emergency vehicle or home repairs, unexpected medical expenses, or paying necessary bills after losing your job.
