If you find yourself struggling to make ends meet, then this list may help you to see where you might be slipping and how to correct the problem:
1. Do not lose track.
Be mindful of your daily or weekly cash expenses or credit card purchases.
For a week, record every cent you spend. Then do the math. For example, an $8 lunch five days a week amounts to over $2,000 a year.
2. Do not forget what always happens.
Month-to-month rent, car payments, and utility bills are generally consistent. But also plan for any payments that are due quarterly or once a year, like car registration. Set aside money every payday for those expenses so you are not caught short when the bill is due.
3. Do not load up on plastic.
Avoid maxing out your credit cards. If you can only pay the minimum on each of your monthly credit card bills, then you’re headed for trouble. Don’t open new cards to pay off older credit card bills. Carry only one major card on you at a time and use it sparingly.
4. Do not lose touch with reality.
Many people set themselves up for failure by planning a budget that’s too strict. Make your budget realistic. You’ll have greater success with it.
5. Do not shop without a list.
A lists forces you to plan ahead and acts as a voice of reason when your will is weak.
6. Do not walk away from free money.
Participate in your employer’s 401(k) plan, especially if it matches a portion of what you contribute. If your company offers flexible spending accounts, use them. FSAs let workers set aside part of their pay—before it’s taxed—to cover medical and dependent-care costs.
7. Do not underestimate the power of compounding.
Few people realize how interest and time swell the cost of borrowing. If you only paid a 2% minimum monthly payment on a credit card bill of $2,000, at an interest rate of 19%, you’d need 22 years to pay off the card. In that time, you’d pay $4,800 in interest!
If you’re saving money, interest works in your favor. A $2,000 CD earning 4.0% compounded monthly each year would earn $442 in 5 years.
8. Do not try to buy happiness.
Don’t use shopping to distract you from emotional pain or stress. Instead, find healthier ways to deal with them, like seeing a therapist.
9. Do not make excuses.
Many people claim they can’t afford to save, yet spend money on smoking, gambling, and streaming services.
To achieve financial freedom and peace of mind, spend less than you earn and save at least 10% or more of your income.
10. Do not be shy.
It’s better to admit that you can’t swim than to find yourself in over your head and all alone.
Don’t be afraid to ask for help. See the professionals at your credit union for help or visit the National Foundation for Credit Counseling website.