Managing finances effectively can be a major challenge – especially when we need to deal with unexpected expenses, such as medical bills or home repairs. Thankfully, our team at Jacovetti Law, P.C. has put together four tips to help you successfully manage your debt.
#1: Organize Your Finances
The first tip to successfully manage your finances is to keep close tabs on your income and your expenses. You can keep a spreadsheet that clearly lists your debts, including the creditor, total amount of the debt, monthly payment, interest rate, and due date. Having all your income, savings, and expenses in front of you will allow you to see the bigger picture and stay aware of your debt and overall financial situation.
#2: Make Monthly Payments on Time
Many people underestimate the importance of paying bills on time. Late payments make it harder to pay off your debt since you’ll have to pay a late fee for every payment you miss. Plus, if you miss two payments in a row, your interest rate may increase. A helpful tip is to set reminders on your phone or set up automatic payments to ensure you pay your bills on time.
#3: Prioritize Debts
Paying off credit card debt first is often the best strategy since it’s easier to pay off smaller debts. However, if you have other bills, such as student loans or car loans, a good tip is to prioritize debts with a higher interest rate. This can help you save money in the long run, especially if those debts may have a large balance.
#4: Create an Emergency Fund
You should have an account dedicated to emergencies, such as unemployment, unexpected medical emergencies, and more. Putting at least $20 dollars into your emergency fund every month will give you a buffer in case you need more money unexpectedly. However, you should set some ground rules for this fund to ensure that you don’t touch your emergency fund unless it is absolutely necessary.
If you find it hard to pay your debt and other bills each month, contact our New York debt relief attorneys today at (516) 217-4488 to learn more about your options.