With inflation persisting, along with rising home and vehicle prices, some level of personal debt may seem virtually unavoidable. In fact, according to various consumer credit sources, the average American carries almost $100,000 of debt. While many people cannot avoid taking on debt liability for large essentials, like houses or vehicles, a vast amount of debt is carried on credit cards and through other loans that people rely upon for personal spending. Staying out of debt is tough—but not impossible. If staying out of debt is a personal goal, some helpful tips to get started down the right path:
A documented budget is a vital tool for helping you keep your spending within your means. A good budget takes into account your entire financial picture, including incoming money each month, necessities (mortgage payments, utility bills, food, vehicle and insurance premiums, etc.), and nonessentials that make up your lifestyle. Budgets categorize your expenses and set limits to what you can afford each month in each category. Having numbers float around in your head is not helpful because there’s no accountability; typing these numbers out in a spreadsheet or in a budgeting app makes you more likely to adhere to the budget restrictions.
Expense tracking helps personal and household financial management just as much as it helps business management. Recording each expenditure allows you to see precisely where your money is going. Accounting programs that enable you to scan and store important receipts make expense tracking, account reconciling, and tax preparation much simpler later on.
Cash used to be king, but with all of today’s digital and mobile payment options, people don’t typically carry as much cash as they used to. While charging for purchases is often convenient and secure, the interest tacked on to each purchase can add up and can create debt if it is not paid off consistently. Many credit card offers come with no annual fee and a low introductory interest rate; when paying off existing credit card balances, paying the high interest ones first can save some money in the long run, as can paying more than the required minimum; applying credit card rewards directly to the balance is an effortless way to get the debt down even faster. Consolidation may also be an economical option if your debt is spread out over multiple, high-interest cards.
Reconciling accounts is not just for businesses, either. Matching your checking account balance each month with its expected balance and aligning the expenditures with all your credit card statements and other financial statements is an excellent way to stay knowledgeable about exactly where your money is going. Catch mistakes as soon as they occur, and correct them before they become costly nightmares. Consistent account reconciling keeps your cash flow predictable, cuts down on errors, and prevents you from becoming overdrawn in your checking.
You cannot predict the unpredictable, but you can prevent a challenge from becoming a crisis with a little financial forethought. Having a small emergency fund can be a lifesaver when life happens. A slowdown at work, a major repair on your home, medical bills for illness or injury, or a family emergency can all bring your earning to a halt and strain an already-tight budget. Many experts recommend 3-6 months of living expenses saved in case of emergency, but if that number seems to daunting, focus on a smaller monthly savings goal that is realistic and that will eventually get you to the higher number over time.
Late fees, interest charges, and penalties for overdue payments are money wasters: you get nothing for them. Repeatedly late payments will lead to poor credit and a poor reputation in the business and lending communities. To maintain your good credit score, keep borrowing to a minimum, and keep owed payments up-to-date while diligently chipping away at large balances.
Checkeeper offers customizable, on-demand check printing and mailing for large organizations as well as individual households. When you’re traveling, moving, short on time, low on supplies, or tired of paying for expensive bank check orders, Checkeeper can help streamline the personal finances and keep owed bill payments up-to-date. All checks created through Checkeeper are automatically stored in a secure online registry for later exporting, expense tracking, and account reconciling. Checks printed at the Cheeckeeper fulfillment site can be in the mail the same day—no supplies or stamps needed from you so that imminently due payments do not need to be further delayed. Cloud-based and mobile-optimized, Checkeeper goes wherever you do and can be accessed 24/7 to help you stay organized and on budget.