Spend Less Than You Earn
When looking at ways to improve your financial health, this one is perhaps a bit too obvious! If only life were that simple. But what you really need is organisation and a budget. A budget you must stick to. A budget is not enjoyable, admittedly, but it is necessary. It can be time-consuming and it’s hard to stay consistent, but it can be defining if used properly.
Perhaps it will help to think of it as a to-do list for our money. Allocate your most important tasks over a specific period of time, whether it’s a day, week, or month. Without a budget, it is all too easy to overspend.
Pay Bills On Time And In Full
Automate your bills if you can. There’s little worse than missing a payment and having extra fees to pay on top of what you previously expected. Time your bill payments where possible to tie in with income.
By automating, you know those bills will be paid. And as long as there are sufficient funds in the account, you do not have to worry about missing payments. On the downside, automation tends to lead to a lac of checking what your bills involve. always ensure you keep checking the totals to ensure they are correct and so you can make savings where possible.
If you cannot automate, then set reminders for dates when bills need to be paid.
Save Where Possible
The general rule of thumb is to save anywhere from three to six months of living expenses. Easier said than done for many of us, but do what you can. Anything helps, and gives you breathing space when the unexpected occurs.
You can also split your wages so that part of it goes toward an account just for paying bills, and another account solely for personal spending. Having savings at hand for a rainy is a huge step to help improve your financial health.
Sustainable Debt
No matter how much debt you owe, you’ll want to make sure you can afford the payments. Debt does not have to be a scary word, as we all have it, from credit cards to car finance to a mortgage.
If you’re having trouble making repayments, you need to sort a debt repayment plan and get on top of the problem. It will not go away without action. Options include plans or consolidation. Balance happiness in the present with paying for your past (aka debt) and planning for the future. Sustainable debt is a great base when looking to improve your financial health.
Aim For A Great Credit Score
Credit scores for consumers range from 300 to 850. A prime credit score is considered a score ranging from 740 to 799. When trying to boost your credit score, the first step is understanding how your credit score is calculated. The majority of your score is made up of two parts: your payment history (whether or not you’ve been making your payments on time), and how much credit you’re using (your debt) versus your available credit (this is called your debt ratio).
Quite simply, make sure you make repayments on time and thus appear trustworthy. It also helps to be in debt, as you have a record on show as to how you deal with making repayments. You should be able to obtain a credit report for free, and should plan to do so on a regular basis. There is always a possibility of mistakes in the report, which you can ensure are removed.
