Want More Money in 2021, Get to Know Your Finances
By: Evelyn Marentette
Tags: Credit Repair, Budgeting Finance Tips, Money Management, Budgeting, Self Help

The most tiresome relationship you ever have will be with your money. And like me, you will tire of never having enough money to pay bills. So this is what I did to change it.

Analogy:

You are on holiday. There are two ways to get to a restaurant for dinner. Walk down a dark alley lined with vipers and pitfalls or stick to the main sidewalk where it is bright, safe and, you can see what is up ahead. Some people may very well choose to venture down the alley because they like the rush of not seeing what is in front of them. Most others will stick to the sidewalk and end up having a wonderful dining experience.

It is what you dreamt about when you planned your holidays.

Yet, when it comes to finances, many people choose to walk through that dark alley. Alone.

You don’t know which steps to take to become solvent. There are a lot of ways to alleviate the dread involved with a dismal financial situation. Many of those ways do not cost money and may even keep more dollars in your pocket.

There are small steps you can take to cut down on expenditures.

You need to know exactly what you owe. Then make a plan — if one does not exist — to pay it back. Get a dedicated notebook from a dollar store and write everything out you owe. Cut expenditures like your cable bill. Cable service is expensive, often costing more than a couple of hundred dollars per month. When you break up a bundle for cable-internet-phone, your internet price may increase. . I pay less than $35/month for a couple of streaming companies. If you have a cell phone, do you need a landline as well? Again, I cut my landline when I cut my cable. That bill was $60/month. Pay your utilities on time. When you pay your bills on time, you do not pay late fees. Can you trim your utilities? Turn the thermostat down a degree or two — get a programmable thermostat. Utility companies have incentives to install these to cut down on hydro during peak hours. If it is too much for one pay, split your month in half(before the due date). Pay your minimum payment on your credit card by the due date. Do not neglect the due date. And do not miss payments. Since the credit card company reports your payments once a month, it is far better to break that payment into two before the due date. It means you will hit the mark as a payment made within the same month as it is due. Treat your cell phone bill the same as you would a credit card bill. If you are late or miss a payment, it is equivalent to failing to pay on a credit card and will affect your credit rate. Bundle your insurances. Can you get a deal if you bundle your car insurance, house/apartment insurance, and mortgage insurance? A lot of insurance companies will compete for your business. This one act can reduce your rates. Check your credit on creditkarma.com or creditkarma.ca. This site has a lot of information about your credit rating. When you check your credit rate, it shows up as a soft hit and does not affect your credit rate. A hard hit is when a financial institution inquires about your credit rate for a loan. Transunion drives Creditkarma.com. You are entitled to a free credit report of your credit history once a year. Should you find a discrepancy, you can let them know. Know your credit score. You want a credit rating above 700. It works this way: the higher your credit rating is, it is easier to borrow money. When you apply for credit and, your credit rating is high, you can negotiate a lower lending rate. BUDGET. The most important piece of advice I can ever give you! When you know where your money is going, you can re-direct it. If there is a leak in your finances, you can repair it. Go to a dollar store and pick up a notebook. Write down all your monthly bills and their due dates. Then rearrange them into two segments. Typically your expenditures are heavier on one pay than the next. What you want is to achieve is a balance between your pay-dates. The first segment includes every bill from the 1st to the 15th. And the second segment, every bill due from the 16th until the end of the month.

Setting up your budget. Your pays will work as follows:

Your pays will work as follows: First pay of the month will cover all bills that come due from the 16th until the end of the month.

will cover all bills that come due from the 16th until the end of the month. Second pay of the month will cover everything from the 1st to the 15th of the following month. Once you are doing this, you will find that it will shift your mindset. You will discover you are no longer living paycheck-to-paycheck.

will cover everything from the 1st to the 15th of the month. Once you are doing this, you will find that it will shift your mindset. You will discover you are no longer living paycheck-to-paycheck. There are plenty of online services that offer free budget templates to help you. And plenty give you a free 30-day trial. I use YouNeedaBudget.com, which took some time for me to wrap my head around. Now I love it.

My Budgeting Guidelines:

On payday, assign a monetary value to each item until every single dollar has a job. Itemize all your expenditures. Your headlines can be immediate obligations and savings goals. An example of those items can be as follows. Loans, rent/mortgage, food, education, loans, gifts, taxes, insurances, utilities, phone, cable, internet, water, transportation, and, etcetera. Keep going until you have every obligation compiled in your list. Put money aside every payday. Even if all you have is five dollars per pay, leave it in your bank. As it accumulates, it will be available to pay for those new tires you need. Or maybe the oil, lube, and filter. A vacation. It is easier to save all year for a rainy day than to be stuck or have to come up with emergency funds all at once. Rainy days do happen. It is best to prepare for your future. Talk to a financial adviser in your bank. There is no cost to you to sit down and discuss your finances with them. They can direct you as well. And read every article you can find on budgeting, saving money, and learn how to make your money work for you.

Now I may not be rich, but I know the location of every dollar. When I buy something, my debit card does not get declined. Since I have money in my bank account, I can gas up the day before payday. My credit rating has improved by over 200 points. I do not pay late fees. And I no longer dodge calls from utilities because I am behind on the bills.

These steps have helped me rest easy when it comes to the depression caused by being in the middle of a financial crisis. I no longer feel the tightening in my throat and the propensity to hide when my phone rings. I am not destitute. I sleep much better at night because I no longer worry about my uncontrolled finances. And I even have a savings.

When I became solvent, companies quit calling. It was almost as if I lost a bunch of friends.

I still stress over money because I remember the days (not so long ago) when I mismanaged my money. Those dark days when I had no idea how much money my ignorant practices were costing me. The difference now is that I understand money. And I know how to budget.

If you believe for one moment that I do not go over budget, think again. I am human. The idea here is you immediately know you went off-budget. When you are aware of that, you can take steps to recover and get back on budget.

If you think you cannot turn your finances around, here is a tiny part of my story.

Along with everything I owed, I had a personal debt of $6150. Once I began to budget, I treated the personal debt like it was from an institution. I made arrangements to pay it back in equal installments. And I pay it every payday, without fail. I began on October 4, 2019. As of December 26, 2020, I owe $1200. I will clear that debt in full by April 15, 2021.

I am not a financial professional. I am not affiliated with any services mentioned below. What I am is an experienced human who used to have financial problems, until I changed my ways.

Resources:

https://www.cnbc.com/select/what-is-a-good-credit-score/#:~:text=What%20is%20a%20good%20credit%20score%3F%201%20Very,661%20to%20780%205%20Excellent%3A%20781%20to%2085

What is a good credit score? | Credit Karma

Advertiser Disclosure They may be used to determine some of the most important financial factors in your life, such as…www.creditkarma.ca

Two decades into the new millennium in statements noted by Olivia Mellan and Karina Piskaldo in their 1999 article on ‘Men, Women, and Money’ from Psychology Today are as valid now as they were then. Most people relate to money much as they relate to a person — in an ongoing and complex way that taps deep-seated emotions. Money is still a taboo topic. Often, the silence is a shield for the shame, guilt and anxiety people feel about their ways with money. I, for one, would not want to tell a date that I’m an overspender. Many individuals have a troubled relationship with money.

Men, Women, and Money Money is such an emotionally loaded topic that few couples discuss it directly. Yet it is, more than sex, what drives…www.psychologytoday.com

If you want to understand how you are spending your money, achieve your saving goals, and improve your personal finances, one of the most effective things you can do is to start budgeting.

https://www.psychologytoday.com/us/blog/the-science-behind-behavior/202001/can-budgeting-help-us-improve-our-personal-finances