Make your money work for you
Published: June 24, 2020
Categories: financial literacy, Financial wellness
Tags: Affordability, Budgeting, Credit Health, Credit Score/Rating, Credit Wellness, Debt, Financial education, Financial Health, Financial Planning, Financial Tips, Managing your Money
One of the most effective ways to improve your credit score is to ensure that you pay your bills on time, every time. Paying your debtors promptly shows lenders that you are a responsible lender and take your debts seriously.
You have to remember that if you have had problems making your payments on time in the past, this will show up in your credit history; however, a number of continuous on-time payments can assist in improving your credit score to help you get your financial health back on track.
Smart financial goals to improve your financial health
Financial wealth is not achieved overnight; it takes time and discipline to build financial wellness and requires a set of clearly defined financial goals. Financial goals are personal milestones that you set for yourself throughout your life and can be classified as either short-term or long-term financial goals.
Short-term goals are those that financial milestones that you hope to accomplish in the next year or two; for example, completing your education or purchasing a vehicle.
Long-term goals may take more time to reach and usually take place in five years or more, such as the purchase of a home or planning for your children’s university education; or even planning for retirement.
Creating a set of specific short and long-term goals is an excellent way to keep you focused and motivated to stay on track and give you peace of mind.
- Settle bills on time: The first goal towards financial health is to ensure that you are able to pay your debtors on time, every month. Paying your bills timeously is not only necessary to maintain a healthy credit profile, but it also prevents you from having to pay late payment fees or other financial penalties.
- Save emergency cash: Once your bills are up to date; the next goal that you should work towards is to create a savings account to put money aside in case of emergencies. Having emergency cash available is important in case you need to deal with sudden and unplanned expenses; such as a medical emergency; house repairs; funeral; or even to tide you over should you become retrenched or lose your job. Emergency funds should equate to between three and six months of your household’s monthly income.
- Create a financial plan: Small adjustments to your spending can result in big rewards. Create a financial plan that encourages you to forecast and control your expenses and avoid wasting money on unnecessary purchases, or to prevent you from spending more than you can afford to. Keep track of your expenses and purchases over a period of time in order to get an idea of what you need to plan for, and what you should keep aside for those unplanned expenses, or to make provision for your future financial goals.
- Increase your Income: To grow your savings faster; you may either need to spend less money or earn more income. If you are unable to motivate a salary increase; or unlikely to receive an increase or promotion any time soon; you could always consider starting a side-hustle to bring in additional income outside of your normal full-time job. One alternative could be getting a traditional second job, however many individuals gravitate towards the flexibility that part-time work-from-home jobs offer. You could also consider other side hustle jobs such as blogging or freelance writing; however, those are far from being the only options available. Depending on your skill set, you could consider proofreading, virtual assistant work, customer service, web design, or any other number of opportunities out there.
- Do your Homework: Many people do more research before purchasing a television than they do before securing an investment or purchasing a home. Purchasing a home or putting money away for your retirement are two of the most important financial decisions you may ever have to make. It, therefore, goes without saying; that you should thoroughly research the options available to you and make sure you select the best possible solution, with minimal risk and highest possible returns.
It takes planning and discipline to achieve financial wealth; however, if you live by the simple rules of paying your bills on time; not spending more than you earn, and plan for the long-term; then you are well on your way to financial health.
If you do however find yourself in a situation where you are unable to meet your financial obligations; or have too many debts to manage; you could consider starting with a debt consolidation loan to help you combine all of your debts into one easy, simple monthly payment with a reduced interest rate.
Contact us should you wish to speak to a Bayport Financial Services consultant about a consolidation loan, or seek financial wellness advice.