No one wants to have money troubles. When we look at our life ahead, living under a sea of debt is far from the vision we aim for. Ideally, growing older and feeling secure and content with money and finances is a lot more common than you might think.
Unfortunately, the sad news is that a vast majority of families have some form of debt, as well as working individuals.
If you’re tired of living from one paycheck to another and are hoping for a financially stable future, without money worries, it’s time to hack any bad habits. It’s easier said than done for some, and having debt and money worries can massively effect some people’s mental health and their current outlook on life. But no matter what situation you’re in, or what help you are seeking, any online life coach can tell you that being financially happy and stable is hugely beneficial for your mental health.
I for one have set my own financial goals for 2020, and one of those includes overpaying my mortgage in a bid to reduce my term. I also set up a private pension when I went self-employed, even though I could have done without paying £100 a month into it when I was first starting out.
So, whatever goals you may have or may not set, these tips below may help you to improve your quality of life while getting rid of mounting debt.
Prioritise your pension
Ensuring that sufficient funds go into a quality pension pot each month is the key for feeling financially happy when you gracefully get older. No one wants the thought of entering retirement as a poor person, even when they have worked so hard throughout life.
Of course, getting into good pension habits means evaluating your current situation, and taking action if you have any Mis-sold Pensions. If you feel this has happened to you, please look into it urgently and work on correcting any ‘pension mess’.
Whether you are self-employed or work for a large/small company, you can control how much you pay into your pension, so do make sure you fully understand the company you are using and utilise to your best interests.
Consolidation means taking all of your debts and putting them either onto one loan or credit card. This allows you to make one single payment a month rather than four or more. A lot of times, credit cards as well as some loans can have high interest rates.
In an attempt to get rid of these hefty fees, consolidation can get rid of them entirely so that you only have one account to deal with on a monthly basis. Before consolidating, it’s important to know how much you owe and the best way to go about lumping everything together, whether this be with a personal loan or a low-interest credit card.
Refinancing is a wonderful way to save money. The way that this works is by taking your debts and both extending the time you have to pay them as well as lowering the interest rate. By doing so, your monthly payments are far less than you’ve had to shell out, saving you money long-term.
It is essential to budget your income so that you have enough for both essentials as well as bills. Budgeting doesn’t have to mean that you need to give up everything you love in life. It simply means making changes to how you spend and avoiding impulse shopping at all costs.
Take your income to debt ratio each month and see how much you’re left with once everything has been paid. If you owe more than what you make, it’s time to consider either refinancing or consolidation.
For individuals who struggle with debt, the last thing on their mind is to save money. However, putting some cash aside into a savings account is one of the best ways to avoid more debt on top of what you already have. You can automate your savings each week by setting up transfers with your bank. The bank takes the money out of a checking account for you and then deposits it into your savings.
If you need to boost your savings, it could be a good idea to start researching into ways to earn extra money on the side.
You have to plan for the future so that you’re financially secure and stable later on as well as today. If you’re living from one paycheck to the next, it can be difficult to plan for the future.
However, by putting some cash aside into a retirement fund as well as an emergency account, you’ll be able to avoid more financial problems later on. It is never too early to start thinking about retirement.
I currently have a private pension set up as I am self-employed, and I’m also focusing on a separate savings account too. I feel like I started quite late, so if I can give any advice to anyone else, it’s start as soon as you can!