Personal financial responsibilities span wide-ranging obligations, occasionally challenging individual money managers to cover all the bases. As financial fortunes ebb and flow, it isn’t unnatural to experience cash flow challenges, but if your financial course consistently leaves you in arears; corrective moves may be required to help you find firm footing.
The particulars are different for each individual, but a few effective finance strategies are successfully tapped by families of all sizes and earners from all walks of life, helping them stabilize cash flow and reach closely-held financial goals. If you need a financial fix, refine your approach to money management, using the following strategies to ease financial pressure and sustain healthy financial balance.
Ease Debt Burden
More than other feature of your personal finances, oppressive debt is capable of undermining your financial health. While manageable amounts of revolving debt and installment obligations are not problematic, debt you struggle to repay quickly weighs-down cash flow, reinforcing a cycle of financial instability.
- Freeze your cards – Well-intentioned financial advisors have actually recommended disabling credit cards, by freezing them in a bowl of ice. While such drastic measures may not be required in every case, a figurative credit freeze stops debt from growing, until you can get a handle on balances. For the best results, carry only a single card, for dire emergencies, getting into the habit of paying cash at the point of sale. You are less-likely to make ill-advised purchases, when paying on the spot, and if the money isn’t available, purchases must wait.
- Consolidate high-interest debt – Depending upon the sources and scope of your personal debt, it may be possible for you to renegotiate repayment, under more affordable terms. A consolidation loan accounts for your outstanding debt as a single unit, issuing funding to cover your outstanding balances. In many cases, interest rates are lower than the levels tied to your existing debt – particularly when your obligations weigh heavily on high-interest credit card accounts. By extending your repayment, and committing to periodic installments, you may also be able to lower the amount due each month, alleviating some of the pressure associated with runaway debt.
- Refinance your mortgage – The interest rate paid on your mortgage may not reflect current mortgage conditions, creating an opportunity for you to reduce monthly debt payments. Improving your loan rate not only eases pressure in real-time, but shaving a couple interest points from your mortgage repayment terms also represents tens-of-thousands in savings, over the life of your loan.
Balance Your Budget
Spending restraint lies at the heart of effective budgeting. Without balance, each month’s shortfall compounds into the next billing period, creating a cycle of increasing debt. A balanced budget, on the other hand, ensures monthly obligations are met, leaving surplus income for building savings and investments.
Getting started with household budgeting may require a nudge, but once you’ve identified unhealthy cash flow patterns and established workable spending routines, maintaining equilibrium is a matter of discipline and resolve.
Covering ongoing expenses is an essential part of effective financial management, so spending discipline goes a long way reinforcing your financial health. For further success achieving your financial goals, it may also be prudent to expand income opportunities. Use these proven money-makers to boost your household income:
- Sell unwanted possessions – Online marketplaces make it easier than ever to connect with prospective buyers, highlighting an accessible way to make money, without an employment commitment. Safety is paramount, so in-person sales should be conducting under controlled conditions, exchanging money at the local police station or another secure spot.
- Earn artistically – Crafts, art projects, photographic images and written content are all in-demand, serving print publications, online venues and individual buyers. If you are artistically inclined, capable of producing professional-quality output, freelance work and direct-to-consumer art sales may present realistic money making opportunities.
- Complete surveys/reviews – In addition to earning with your own creative content, it may also be possible for you to generate cash flow reviewing media and completing surveys. Some jobs call for in-person visits, but many of these types of opportunities require nothing more than a computer and internet connection.
- Take part-time seasonal work – Seasonal employment offers short-term financial relief, enabling you to earn fast cash, without a long-term commitment. Depending upon the time of year, flexible weekend shifts may be available in retail settings, restaurants, entertainment venues, tax preparation offices and other facilities facing peak demands.
If one budget area suffers more than others, accumulating savings is the single important financial concern most commonly pushed to the back burner. So much so, in fact, many mid-life money managers suffer from inadequate savings, with little time to make-up shortfalls, before leaving the workforce. If your personal savings fall short of expectations, prioritize the practice, using these and other proven strategies to accumulate a nest egg:
- Set savings goals and review progress
- Use automatic withdrawals to fund savings
- Save for emergencies, major purchases, and retirement
- Maximize tax advantages using approved savings for education, health care, etc.
Financial stability relies on balance and discretion, gradually building security and wealth you can count on during retirement. When your personal finances veer off course, follow these four steps to find solid ground.