Paying Debits and Learning to Save Money
‘Don’t worry, be happy’ is great advice, but it isn’t easy to follow when it comes to experiencing financial issues. Many of us worry about money – how much we owe, why we can’t save enough – and that doesn’t make us happy. High on the list of financial concerns for many people are bills that need to be paid – especially credit card debt, loans and health-care costs. By paying debts and learning how to save many people can find relief from financial stress.
In this article we will cover:
- Paying Debts
- Learning to Save Money
The more money you owe the deeper the hole feels, and interest costs can add up quickly if you are only making minimum payments. To make it worse, missing payments can hurt your credit rating, making it more difficult to get a loan in the future.
Morgan says the key is to pay off those bills as soon as you can. She also suggests making more than the minimum payments whenever possible and paying off loans or credit card balances with the highest interest rates first.
By only making the minimum payment each month, you will end up paying more in interest charges over time. And the higher the interest rate is, the more it will inevitably cost you.
Evaluate your debt payoff strategy with this calculator. (NOTE: This is only an estimate. Actual payoff amounts and timelines can vary.)
Learning to Save
The wise move here is to work on paying off your debts first, then start saving. Building an emergency fund is important because that money can be used instead of having to borrow money for unexpected expenses such as replacing a broken refrigerator or medical expenses. When it comes to your health, Morgan also recommends having health insurance to help offset the high costs of care.
Take the time to figure out how to balance your income and your expenses. As well as prioritizing your needs and wants. Many people find it’s easier to automate monthly fixed expenses and savings deposits. That’s because you can set up automatic payments at your financial institution to pay those expenses. After that if you have leftover money, you can automatically direct it into savings accounts. Be sure to also take advantage of employer matches for retirement funds; it’s essentially free money and can make a big difference over time.
Then, once you find the balance between paying debts and saving for the future, you’ll worry less and smile more.