Having some form of financial freedom will help you find peace of mind, and most importantly frees up your time and money for other priorities so you can enjoy life more.

THERE are plenty of reasons to get your finances in order, and this includes paying off your debt, building a savings account and not having to worry about living from paycheck to paycheck.

There are many people out there who have amassed a fair amount of debt, and are thinking it is impossible to get out of it all.

Well for every problem there is a solution. Here are some ways you can stretch your ringgit and help avoid that `too much month at the end of the money' feeling.

Learn how to stop incurring new debt and change your life today with a sound budget. Here's how:

1 Reduce your expenses - Have a clear idea of where your money is going; then you can look at ways to cut down and lower the cost of your required living expenses. Always keep in mind that it is not just about cheaper, it is about efficiency. Understand that reducing expenses is a lifestyle pattern and a change in your habits.

2 Record your spending - The idea of writing down what you spend is a concept most people find annoying at best, and useless at worst. However, this is actually your key to getting out of debt. You are in debt because you spent money you didn't have. You can avoid more debt by knowing what you are spending your money on.

3 Figure out your debt paydown - Debts can often feel overwhelming because you really don't have a clear idea of how much in debt you really are. Gather your bills and make a simple list or spreadsheet of all the debts you have. Write down all the pertinent facts, including name of the creditor, your total balance, your minimum monthly payment and your interest rates.

4 Start paying it off - Take the debt pay down figure you have trimmed from your budget and apply it to debt repayment. It is a good idea to prioritise the debts to which you are going to apply this extra money. Do you have debts that are past due? Do you have debts with exceedingly high interest rates? Consider these top priorities.

5 Manage your credit - A poor credit score costs tens of thousands over the years in increased interest rates and insurance costs. Pay all the bills on time or early. Pay off revolving debt (credit cards) and put those away.

6 Savings - This concept is as old as money but an extremely tough one to master considering all the debts people have succumbed to. `Saving for a rainy day' is what some call it and if you find yourself on financial life support or have very little funds left in your bank account, then a safety net is vital. Having extra money for those unexpected times like a lay-off at work proves to come in handy when you most require it. Saving money can in many ways, ease the tension and stress that many people have concerning job security so be sure to save whenever you get the chance to.

7 Financial Options - Having some savings will open up many options and opportunities for you down the road, especially if you are thinking about retirement. When you have that extra RM10 or RM20 to spend, know that you can be putting it towards your future. Always be wise about how you spend your money and take a more proactive approach when saving that extra ringgit. Being financially stable even after your working years is what will enable you to live a healthy and happy life. Your worries will disappear in the future, but you need to save today to turn those dreams into a reality.


Post a Comment


Around Us