Clear the Clutter Surrounding Your Finances
We all recognize the need for an occasional deep cleaning in our lives, yet offices and living spaces are not the only areas in need of periodic uncluttering. Your financial life may also need a good scrubbing, and there is no time like the present to take the opportunity to review your entire financial picture to see where you can reduce spending and build savings. Here are a few tips to help you get started.
Make a budget and stick to it
Oftentimes the reason our finances fall into disarray is because we don’t keep up with our purchases and spend far more than intended. Creating a budget to curb spending habits can be a great way to hold yourself accountable. Not only should you allocate a certain amount to spend on a routine basis, but you should also take stock of how your money is being spent. Unnecessary expenses, like unused subscriptions and memberships, may be eating into your wallet more than you realize. Impulse purchases can also derail your budget.
Online financial management tools like myTrustmark® make budgeting easy. You can create a custom budget, categorize spending and track trends to always know where you stand. Learn more or enroll at trustmark.com/myTrustmark.
Improve your credit score
One of the best ways to get your finances in order is to tackle any issues that may negatively impact your credit score. Your credit score comes from a variety of different sources, and knowing which ones may potentially bring your credit score down is essential to getting on the right track. Review your current outstanding debts and develop a plan for paying them down or off, such as:
- Pay all your debts on time. A late fee or penalty can impact your credit score, so never forget to make your payments as scheduled. Consider setting up automatic bill payments to help keep you on track.
- Pay above the minimum payment amount owed. If you can afford to pay more than what is required on your debts, you can help reduce the interest you owe, saving yourself money in the long run.
- Pay off one debt at a time. Focus your attention and resources on the debt with the highest interest rate or the one you can reasonably pay off the quickest.
Build an emergency fund
Unexpected costs, such as car or home repairs, medical bills or loss of income can result in additional debt. Having funds available to cover unexpected expenses can keep your budget in check, as well as ease the burden and stress often associated with such situations.
Dedicate a specific amount of money in your monthly budget to an emergency fund. It is a good idea to have enough in savings to cover three to six months of your basic needs. Consider setting up an automatic deposit or transfer into a savings account, and do not give yourself easy access to that account. Then you will be less tempted to use these funds for non-emergencies.
Know what to keep and what to shred
Your physical records also need to be kept neat and tidy. Before you start tossing things in the wastebasket, make sure they are actually disposable. Certain documents contain information that you do not want to leave sitting in a trashcan in front of your house. Rather than risk identity theft, shred all of your old bills, receipts, reconciled bank statements and canceled checks. Tax documents you determine are old enough to toss should be shredded as well.
Enhance your financial knowledge
Trustmark’s free, online Financial Education Toolkit can help you learn how to manage your money more effectively and make decisions that strengthen your financial future. Visit trustmark.com/financialtoolkit to learn more.