There is no doubt that most people were happy to bid farewell to 2020. For many, it was incredibly challenging to maintain your personal finances while contending with a pandemic, which continues to wreak havoc. In an effort to better prepare yourself to weather whatever storms comes your way in 2021 or beyond, it’s wise to get yourself better setup with a good plan!

Take stock of your finances

It could be said that it’s easier to manage money than ever before thanks to technology and innovative tools. However, it’s also easy to lose track of spending when you tap to make a payment or pay bills via direct debit. The first thing to do in 2021 is to take stock of your finances and get an accurate idea of what is going on in your accounts. How much money do you have saved? What is your current account balance? How much do you owe in debts? It’s important to understand the difference between manageable debts and those that have the potential to spiral out of control. If you’re up to date with your mortgage, or you’re paying back a loan and you can afford the repayments, there should be no cause for concern.

If you’re borrowing money, you’re using credit cards to get by, or you’re finding it hard to cover your bills, it’s wise to try and find solutions. Seek expert advice and try and avoid adding to credit card bills. You could save on interest fees by doing a balance transfer while you work on ways to reduce your debts with an adviser. 

Having a good understanding of where you’re at now will help you decided where you need to go moving forward!

Consider borrowing carefully

The majority of people have borrowed money before, YoungMoneyFinance included. Most of us take out mortgages to buy a house, and many take out loans to cover home renovations or fund purchases, such as a new car, for example. It is helpful to have the option to borrow money, provided that you are able to cover the repayments. If you take out a loan, and there is a risk of falling behind with repayments, this can affect your credit score and increase the risk of getting into more debt. Before you borrow money, think carefully about your options, read the small print and choose a reputable lender. You should never be pressured into taking out a loan. Search online for an approved lender and follow the instructions. If you’re looking for a short-term loan, you can apply at paydayloanspro.com.

Always ensure you understand the terms and conditions and check the interest rate before you submit an application. There may be cheaper ways of borrowing for a short period of time, for example, asking your boss for an advance on your wages or borrowing from a family member. 

Remember that compound interest is a powerful tool, and try to minimize when it’s working against you and instead have it be working for you!

Budget

Budgeting is one of the most effective ways to make your money stretch further and eliminate unnecessary spending. Start the year as you mean to go on, creating a monthly budget. With a budget, you can decide how to spend your money, cut back on non-essentials, such as subscriptions you never use, and save more. Go through your budget, highlight areas where you can claw back cash and set yourself a spending limit. For budgeting tips for beginners, take a look at this helpful guide.

If you’re making resolutions, why not focus on improving your finances in 2021? Money worries are a common cause of stress and sleep troubles, but there are ways to address issues. Seek expert help and advice, keep a close eye on your accounts, think about borrowing very carefully and learn to budget!

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