Paying Debts and Learning To Save Money Can Reduce Your Financial Worries
‘Don’t worry, be happy’ is great advice, but it isn’t easy to follow when it comes to financial issues.
That’s because many of us worry about money – how much we owe, why we can’t save enough – and that doesn’t make us happy.
High on the list of financial concerns for many people are bills that need to be paid – especially credit card debt, loans and health-care costs. If we have a lot of debt, it makes it hard to save money for things like unexpected emergencies and long-term goals.
Debt is a big concern. The more money you owe the deeper the hole feels, and interest costs can add up quickly if you only make minimum payments. To make it worse, missing payments can hurt your credit rating, which can make getting a loan harder in the future.
Experts say the key here is to get those bills paid off as soon as you can. Their advice includes making more than minimum payments whenever possible and paying off loans with the highest interest rates first. That’s because minimum payments mean you’ll pay more in interest charges over time and the higher the interest rate, the more it will cost you.
The wise move here is to pay off your debts, then to start saving. Building an emergency savings is important because that money can be used instead of having to borrow for unexpected expenses such as replacing a broken refrigerator or a health issue. When it comes to health, experts also recommend having health insurance to help offset the high costs of care.
Take the time to figure out how to balance your income and your expenses. Many people find it’s easier to automate payments and savings. That’s because you can set up automatic payments at your financial institution to pay loans and if you have leftover money you can automatically direct it into savings accounts. Be sure to also take advantage of employer matches for retirement funds; it’s essentially free money and can make a big difference over time.
Then, once you find the balance between paying debts and saving for the future, you’ll worry less and smile more.