So, You Didn’t Win the Lottery
Join the club. Here are 3 easy steps to start taking control of your finances…
Cancel the 500-ft yacht. Call off the party in Beverly Hills. Phone your friends and relatives to let them know they won’t all be receiving Lamborghinis for their birthdays this year. You didn’t win the lottery, specifically the 1.4 billion Powerball drawing. You missed out on the chance to be a multi-multi-multi-millionaire. Sorry!
If you were counting on those Powerball winnings to get you out of debt, you’ll have to find another way. Luckily, there are tons of ways to achieve financial well-being that don’t involve winning the lottery. They aren’t nearly as fun as becoming a zillionaire overnight, but they can still put you on the path to prosperity. (If you did win the lottery, of course, you can ignore all this. Tell Kanye and Kim we say hello.)
1. Make a Budget
This is where all good financial decisions begin. Before you can take control of your finances, you need to have an accurate picture of your finances.
There are lots of good budgeting apps and programs out there, a number of which are free to use. Some of them even link up to your bank accounts and update themselves in real time. You can also just make your own budget using an Excel spreadsheet. Worse comes to worst, a number two pencil and sheet of paper is enough to get you started.
Try to start by building a budget based on how you currently spend your money. Odds are that the end result will be in the red, since you’re likely spending more than you take in each month. Don’t worry, though. You’ll use this first budget to create a second, aspirational budget that ends in the black.
2. Cut Back Your Spending/Increase Your Income
Once you have your budget, it should become pretty clear to you where there are some possible spending cuts. For instance, while it’s true that that food truck with the trendy tamales makes for a tasty lunch, it’s probably a lot cheaper to bring a sandwich from home. Or what about that gym membership that, in all honesty, you don’t use enough to justify the expense? It doesn’t matter where you find places to cut back, all that matters is that you make the cuts.
The other side of this coin is to increase your income. This could mean asking your boss for a raise or looking for a better-paying job, but it doesn’t have to. The likelier path to increasing your income is to find additional work, something as simple as working some shifts as an Uber driver, or shoveling out a neighbor’s driveway. So long as you’re careful not to burn yourself out, the extra money will really help as you right your financial ship. You can learn more in the post Side Hustling Your Way to Zero Debt with Eric Rosenberg from Personal Profitability.
3. Consolidate Your Debt
Lastly, take a look at your debt, and pay special attention to the APRs and/or interest rates that you’re being charged. Before you worry about paying down the balances, you should try and minimize those interest rates. The less you’re getting charged each month, the faster you can pay everything down.
The best way to do this is to consolidate; take all your outstanding loans and credit card balances and see if you can combine them into a single balance with, ideally, a lower interest rate. For instance, you could look at transferring your credit card balances onto a new card with an introductory offer.
Even better, you can look at taking out a personal installment loan. These products come with fixed monthly payments and longer repayment periods, which help ease the strain of paying off your debt while also staying within a strict budget.
And if you’re someone with less-than-perfect credit, check out our website, www.opploans.com. At OppLoans, we offer personal installment loans with affordable repayment terms that work for you.