Live Below your means. Don’t buy stuff you don’t need. Always sleep on expensive items. Create a budget and stick to it.
Though many people struggle with large amounts of debt and other financial problems, women carry larger loads. That’s because of more borrowing mistakes and emotional spending. If you feel chained to financial debt and had your final sick and tired moment, keep reading. You’ll learn why women typically get caught up in it and how to live below your means to break free.
Pay off your credit cards
Even though the average person has almost $6000 in credit card debts, women are more likely to mismanage their accounts. Sixty percent of women carry a balance from one month to the next, compared to 55 percent of men. Moreover, 42 percent of women only pay the monthly minimum required. That’s compared to 38 percent of men doing the same.
Budget permitting, pay off your credit cards every month. Pushing off interest and principal payments into the next month are the most expensive forms of debt you can carry. The number of women making $70,000+ and are still rolling over their credit cards is insane. Too, the problem for many women is that they tend to earn less. They also must pay more of their income in student loans because they’re more likely to attend college. And so, this arrests their ability to cover their other expenses.
Make student loan payments while in school
Although student loans don’t require payments while you are in school, nothing is preventing you from starting to pay off that debt while you’re studying. Any payments you make then will go toward the principal of your loan, which will reduce the total amount you owe. This means less interest to pay in the long run. Consider getting part-time job to help you make early payments. You’ll be very thankful you did. If you have a part-time job already and get a raise, increasing your loan payment by the raise amount will also be a help.
Start budgeting and cut your spending
During this lockdown, most women got that little pick-me-up that comes from buying clothes and beauty products online. (I get it!) However, it’s never a bad thing to understand where all your money goes each month and cut out emotional spending. Start tracking your discretionary spending; you might be surprised how much money you’re spending on lattes or even just dining out too.
Consider living below your means by diverting at least some of those funds to decreasing debts and increasing savings. Also, if you finished school and are working, odds are you’ll be getting a tax refund. While it might be tempting to take a trip, you could lessen your student loan and/or credit card by applying your refund toward your debts instead.
Save a portion of your income
Everyone should save 10 to 15 percent of their total income. But if you can’t save just 10 percent — even while paying off debt — this could be a sign that you’re living beyond your means. Whether it’s in a savings account or a retirement fund, every woman should have savings, and you should aim to have 6 to 9 months of living expenses always set aside. If you feel you can’t save any money, you are spending on products and services you, most likely, don’t need. Pay yourself first. If you cut back each month and don’t go out to eat, or to the movies, or whatever it takes for you to spend less, you will have more money to save.
Have An Emergency Fund
Part of the reason you need savings is to pay, in cash, for those unpredictable emergency purchases, like if your car dies or you get hit with a costly medical bill. Putting these kinds of expenses on a credit card or financing them with a loan will continue the cycle of living beyond what you can afford. Build an emergency fund of about $2,500 — that way, you at least have a safe cushion when you are hit with an unexpected expense. Try to do this within six months, and set aside as much as possible each month toward the goal