Taking Control of Your Finances

If money is stressing you out, there are actions you can take. The best way to tackle money troubles is to take control and make some changes. You can’t get a handle on your finances until you know where your money is going, and you can’t manage your cash until you control your spending. Bottom line: Set up a budget that covers your expenses and frees up money to put toward your short- and long-term goals.
 Deal With Your Debt
If you have outstanding credit card balances or loans, paying down your debt will free up extra cash. The less you pay in interest, the more money you’ll have for other things, like saving for retirement. Credit cards generally carry high interest rates, so that’s a good place to start. To get a handle on credit card debt, stop using your cards for new purchases. Focus on the credit card account with the highest interest rate and pay off that balance. (Note: Always pay at least the minimum amount due on all outstanding balances and loans.) Once that debt is zeroed out, go on to the account or loan with the next highest interest rate.
 Eliminate Any Penalties
When money is tight, every penny counts. You can’t make every penny count if you have to pay late fees on your credit card accounts, loans or other bills. Get into the habit of always paying on time. Try paying your bills as soon as they arrive or arranging for automatic payments (as long as you keep an eye on your bank balance to avoid overdraft fees and/or interest charges).
Reduce Stress Later, Too
Taking control of your finances can help improve your situation now – and likely later. Let’s say you eliminate a few splurges and free up $10 a week. Since saving for retirement is a big goal and a top priority, you increase your contribution to your employer’s retirement plan or other retirement savings account by that amount. Over time, that extra money could make a substantial difference in your balance. Once you see how much of a difference small amounts can make, you just might look for another $10 a week to contribute. And the next time you get a raise or bonus, you might decide to increase your contribution again. For instance, saving $10 a week over 20 years could yield approximately $22,000.
Look at the Difference
The faster you pay off your credit card debt, the less interest you’ll pay and the sooner you’ll have more money to save for other things. There’s a big difference between paying $100 a month and $350 a month on a $5,000 credit card balance. You could save $1,700 by paying $350 a month.
Tradewinds Financial Services offers a full range of financial services from life insurance, long term care and retirement planning, to customizable account services, investment portfolio planning and more. Tradewinds Financial Services is located at 650 Townbank Rd., Suite #103, North Cape May. To schedule a complimentary consultation with owner Tom Becker, call (609) 843-0468, email TBecker@tradewindsfinancialservices.com or visit www.TradewindsFinancialServices.com.
Securities offered through LPL Financial, member FINRA/SIPC.