After readingPart I of Ways to Dig Yourself Out of a Financial Hole, we hope you’ve found your footings and are in a better place than before. It’s crucial to establish smart money habits now in order to build yourself a healthy financial future.
Here are the next steps in digging yourself out.
1. Stop Shopping
Our culture tells us that if we want something, we should buy it, even if we don’t technically need it. Remember, food, shelter, basic clothing, and utilities are needs. Everything else is wants.
If you shop for fun, stop doing that and try avoiding brick-and-mortar stores. Curbside pick-up is a valuable tool, nowadays. Delete your stored credit cards in your Apple/Android Wallet, and remember the harm in “one-click” shopping.
It might sound harsh, but this is part of your plan to meet your financial goals, including getting out of debt.
2. Enlist the Help of a Friend
Find a friend that is also trying to get out of a financial hole and lean on each other for support along the way.
3. Focus on What You Have, Not What You Want
Rather than obsessing about what you don’t have and really want to buy, think about what you do have. Make a list of your advantages such as, good health, a reliable job, a university scholarship, and the determination to one day not be in the red.
4. Rethink Family-Related Spending
Do you still support your grown children? Perhaps they’re still on your family phone plan, or health insurance, or you’re covering their rent.
It’s natural to want to give your children the best, but not at the expense of your financial future.
Remember, your kids have many decades to build their financial lives. Use those dollars towards your debt, retirement savings, emergency fund, or some cash reserves.
5. Keep Saving for Retirement
Yes, this may sound a bit backwards.Why am I saving for retirement when I still have balances on my credit cards with 24% interest?
Because you can’t finance retirement!
Retirement is about growth and growth takes time. Be sure to resist the temptation to dive into your savings early. The longer it stays there, the better your chances for it lasting throughout your retirement.
6. Build Your Emergency Fund
Set an initial goal of three to six months of expenses put away as your “emergency fund.” This money is set aside for those instances that come up unexpectedly, and instead of reaching for your credit card, you’ll be able to use this money to pay it in full.
7. Trim Recurring Expenses
Are you paying for subscription services that you completely forgot about? Or maybe a gym membership that never gets used? Look through your monthly statements and see if there’s anything you may have forgotten about over time.
Look for better deals on internet, phone, and cable service, too. This can save you a lot of money, especially if you bundle services. Or even ditch cable all together! Many people have found serious savings by switching to streaming services.
8. Celebrate Your Progress!
You won’t get out of your financial hole overnight, so it’s especially important to celebrate the small milestones along the way.
Once you’re out of the red, it’s important to remember to keep these savvy money tips in place.
If you need help digging yourself out of your financial hole, enlist the help of one of our financial professionals to help keep you on track. Speak to a representative at one of ourtwenty- two branch locationsfor more information.
