You graduated college, landed a good paying job and bought your first starter home. These are all good things. However, now you find that you’ve racked up large amounts of debt between credits cards, student loans, a mortgage, and a car loan. The good news is that you can get your finances in order in a relatively short amount of time and start to enjoy a comfortable lifestyle.
Maintaining Your Home
Homeownership can cost much more than you originally planned. In addition to the monthly mortgage payment, you also have homeowner’s insurance, PMI, and property taxes. And, unfortunately, that’s just the beginning. You’ll also be responsible for any repairs to the property on the outside and the inside. Thankfully, there are many home projects that you can do on your own to save money.
Updating Your Home
If you recently purchased an older home that needs some TLC and got a terrific price, that’s great. The downside is that you will need to spend money to restore it. You can, however, pick one room such as the kitchen, especially if the appliances are outdated. Appliances that are old consume a lot of energy. If you replace them with energy-efficient appliances you can save money on your utilities. When you first start out on your own, having the money to purchase kitchen appliances may prove to be something not likely in your budget. Luckily, there are companies that offer loans just for this purpose like a rent to own kitchen, so you can replace them all and then pay them off in installments over a couple of years.
While running a household can be expensive there are ways to cut costs. For instance, with your utilities, you can take shorter showers, use the washer and the dishwasher during non-peak hours, and raise and lower the heat/air conditioning. If you have cable service chances are good you have many channels you never watch. Contact the service provider and see if you can reduce the bill.
Spend Money Wisely
When you first start out on your own every penny counts. That’s why it’s important to manage your money responsibly. Unbelievably, buying a $4.00 hot latte 5 days a week on the way to the office and going out to lunch daily can consume much of your petty cash. Instead, select one day of the week as the day where you can splurge and the rest you brown bag and make your coffee at home.
Focus on Your Debt
Having debt is not uncommon. However, if you have so much debt that you are now cash poor, you’re going down a road that leads straight to a financial disaster. Getting your debt under control now, by reducing it, will prevent that from happening.
Learning the Importance of a Budget
Creating a budget now while you’re young will set you up for a life with many opportunities and a sound financial future. A budget is so much more than a sheet with a bunch of numbers. It gives you an insight into your spending habits and then lets you focus on paying down the debt, saving for things like a nice vacation and of course your retirement.
Money Set Aside
In order to avoid a minor repair becoming a major setback, you also need to have money set aside in a separate savings account just for emergencies. Without it, you’ll end up borrowing from your bill money or putting the repair onto a credit card that will end up costing you additional fees.
Starting out on your own is unchartered territory that can be both thrilling and frightening. However, with a plan in place and being responsible with your money you’ll have a bright and fulfilling future.