Figuring out your personal finances and what works best for you can be difficult, especially when you’re just getting started with that daunting task. Or maybe you’re just stuck in quarantine during the shelter-in-place orders and are looking for something to occupy your time and make yourself feel a little more productive.
So here are some tips on how you can get your personal finances in order and start on a better financial path.
- Make a list: Create a list of all your existing debt and let that soak in for you. Put as many details as possible on your list, too. Include the interest rates of each outstanding piece of debt and start mapping out your plan for paying off each part of your debt. It’ll make everything a lot less overwhelming from the get-go.
- Pay more than the minimum payment. A minimum payment isn’t the set amount that you have to pay. You just need to pay at least that amount. If possible, pay more than the minimum payments because then you’ll be able to pay off the bill quicker than expected.
- Figure out your interest. You’ll want to figure out what your interest rates are, not just in the long run but on a daily basis as well. According to Student Loan Hero, you can calculate what your daily interest rate is with the following formula: (interest rate) x (current principal balance) ÷ (number of days in the year) = daily interest.
- Set up a savings account. And take it a step further than just setting up a savings account. Automate your savings so that you have money consistently going into the account. And not only that, you’ll also be able to grow your emergency fund and have a cushion in case of emergencies. You can set up your paychecks or any direct deposit you have set up from jobs to automatically deposit money into your savings as well so that you’re constantly accountable.
- Review your accounts annually. At the end of each year, you’ll want to reevaluate your finances and make small (or major) adjustments as needed. It’s a great opportunity to make sure the plan that you laid out for yourself in the beginning of the year is still on track and that you’re on the path toward paying off your debt and growing your finances.
- Challenge yourself. Create financial challenges for yourself, like setting up a day where you don’t spend any money. Even if you only do it once a month, you’ll be able to create a habit for yourself where you can set healthier spending habits for yourself.
