Steps to Boost Your Financial Future
Do you need some pointers on how to get your finances on track? Coming up with a plan of action can seem overwhelming at first, but there are some simple things you can (and should) be doing, even if you’re just starting out or recovering from a bit of a setback. Let’s look at just a few of them to help you get closer to financial freedom and the life you’ve always dreamed of.
Step 1: Dream to Find Your “Why”
Yes, start dreaming! What do you want your life to look like in 5, 10, or even 20+ years? Knowing this will help develop your “why.” Your “why” is what keeps you motivated and committed to reaching your short-, mid-, and long-term goals. Whether it’s buying a house, going on that dream vacation, getting out of debt before retirement, or other goals, knowing your “why” is crucial to working toward your dreams.
Step 2: Automate Savings
Reaching your goals take time and dedication, but regularly putting money aside—even small amounts—is the best way to watch your money grow. And automating your savings can help you stay on track by not having to worry about putting money aside yourself. Over time, you could see some big rewards. For
instance, if you automatically put aside just $20 a week, you’d have $1,060 at the end of the year!
Step 3: Establish/Raise Your Credit Score
A solid credit history, consistent with on-time payments, and a low debt-to-credit ratio are the keys to a higher credit score. And you’ll need a decent one if you ever want to get a loan to buy a home, rent a house or apartment, get a decent credit card, or even apply for certain jobs. In short, your credit score helps lenders, landlords, and even employers determine if you’re reliable.
A higher credit score can also open the door to the lowest available interest rate when you borrow. If you’d like to improve your credit score, there are several things you can do.
Step 4: Decrease Debt to Save Even More
If you have a mortgage, it’s probably your biggest bill each month. Usually, your second largest payment is your car. Depending on your situation, it might be a good time to refinance. In other words, replace your current loan(s) with a new one for a lower interest rate or shorter term. This could allow you to lower your monthly payment or pay down debt faster.
Another option is a personal loan to consolidate your high-interest credit cards, loans, and other bills into one low monthly payment. You may be able to lower your interest rate or reduce your term, which can help you lower your monthly payments and/or pay down debt faster.
You may also want to see if you can reduce your insurance costs by comparing multiple carriers.
These steps are simple, but admittedly, these aren’t the only ways to get on track. So, let us help you get started. As a member of Arkansas Federal, we’ll walk alongside you and help you evaluate your unique financial situation. From there, we’ll look for ways to solidify your financial footing and help you work toward your goals.
Read Financial Planning: Helping You See the Big Picture
Read Financial Basics for Millennials
Read Women and Asset Protection: How Insurance Can Help