If you find yourself with no saving, no job, a credit card debt and no idea where your money has gone, it’s time for a financial health check-up. Good financial planning is more important than ever, especially with so much uncertainty now.
The COVID-19 pandemic has certainly disrupted everyone’s lives. With the lock-down, many people’s job has been affected and as well as the entire economy.
Whether or not your income has been affected, it’s time for a Financial Health Check-Up to set yourself up for a greater year.
Look into your finances
Check everything, bills, credit cards, home loans, after-pay accounts, subscriptions, bank accounts. Write down all your ‘assets’ and liabilities’, and then you will know exactly about your current financial position.
Do you have how much money you have coming in every month? If the answer is no, you need to find out your exact income – active and passive in total.
Expense is more important than income, if you don’t track your spending, no matter how much you earn, you will find it struggle in the long term. There’re plenty of handy apps that can help you to understand where your money goes.
Now you have a clear picture of what your finance truly looks like.
Budget your finances like a business
You should set goals and create a budget, splitting up your goals into short-term and long-term. Another secret tip is that start treating your own finances like a business, which means profitable is the main goal, by means of taking inventory of your income and expenses, and then take a closer look at spending by category.
Start an emergency fund
The COVID-19 Pandemic makes us understand the importance of an emergency fund. Having extra savings for emergency use can definitely keep you out of financial panic and help you reduce your stress. Furthermore, if you cultivate the habit of saving money and make it a non-negotiable monthly expense, just like your loan repayments, soon you will have more than enough.
Pay off your debts
If you are a property owner and have a credit card debt or personal loan, do you know that a debt consolidation home loan allows you to pay out your debts under your mortgage? Instead of paying off multiple debts, you pay off all your debts with one home loan repayment at a lower interest rate. Keep in mind that as a licensed mortgage broker and financial solution provider, we can really help!
Cancel your credit cards
With credit cards abundantly available, getting what you want right away is a common practice. Also, having credit cards become a fashion trend especially among young people. However, a credit card can really be a big obstacle to improving your finances. As the major downsides of using credit cards are potential credit card debts that you cannot afford, potential damage to your credit score and ultimately bankruptcy.