Congratulations! You’ve taken the first step of wanting to improve your finances – learning how to do so. Taking this first step of wanting to improve already shows your dedication to the task at hand. Understanding your financial health and being able to improve and manage it is an important step to being financially prepared for your future. Here are a few ways you can start taking steps towards improving your finances.

Write down your debt
Being able to see all of your debt written down will help you to see what you’re up against. Write down each loan and credit card with the amount of debt you owe, what the interest rate is, what’s the minimum monthly payment and the length of the loan. This will help you calculate your total debt, but also break it up so you can see what debt should be paid off first. Best practice is to pay the minimum monthly payment on all loans and credit cards but put any extra money you can afford to put forward towards the debt with the highest interest rate.

Start a Budget
There are numerous resources out there on how to start a budget. While it may seem like a difficult process, it’s not as hard as you may think. Starting and maintaining a budget will help you to see where you’re currently spending your money and can be a great tool for you to start cutting back in certain spending areas and start saving or putting more money towards outstanding debt.

Cut Back on Unnecessary Spending
When you create a budget, you’re able to see where you’re spending your money. If you find that you spend a lot of money on going out to eat, or you know that you have an online shopping addiction, try to cut back on that habit. Going out to eat is more expensive than bringing food from home and online shopping can often be for things that are wanted instead of things that are needed.

Pay Attention to Automatic Payments
Do you have some automatic payments to subscriptions that you aren’t even using? Think about it – are you paying for a gym membership of $20/month but don’t actually go? What about automatically paying for cable, but you only actually watch Netflix?  Take notice of your automatic payments and if there are subscriptions that you aren’t actually using – get rid of them and save the money instead.

Create a Savings Plan
You may be in the situation where you want to save, but have a hard time actually putting money aside.  Create a savings plan for yourself so you’re saving a little bit with each paycheck. You can use direct deposit to automatically take $50 or $100 out of your paycheck to go directly towards savings so you aren’t tempted to spend that extra money each month. Even smaller amounts of $10/week can add up over time, after all that’s $520 a year in savings you wouldn’t have had before!

Increase Your Income
It’s great to be able to cut back on spending and paying off your debt but being more financially stable comes with an increase in income. Being able to increase your income and living below your means, will help you to save more money. You can increase your income by asking for raise at your current job, or perhaps picking up a side gig.

Understand How Credit Works
A credit score is a very important factor into your financial health.  It’s essentially your reputation of how well you pay back your debt. Having a bad credit score can stop you from getting loans, apartments, and even jobs.  If you can get these things, it’ll likely be more expensive for you than if you were to have a good credit score, since you’re seen as more of a risk. Learn how to build your credit and actively take steps towards improving it.

When Possible, Refinance
Refinancing can help you save tons of money on over the course of your loan’s term. It can help you reduce your debt significantly by lowering your rate. At Sikorsky Credit Union, we have great rates and low fees that can save you money and help you get equity faster.

Start Learning About Finances and Investing
The best way to get better at something is to constantly learn and read about it. Spending even a few hours each week learning about finances or investing can help you get better. For starters, investing in a Certificate is an easy way to start investing with a guaranteed return on your money.

Make the Most of Your Employee Benefits
If your employer offers you any benefits that are worth the extra money to have, take advantage of it! For example, if your employer does 401k matching up to a certain percent, put that much into your 401K. This will help you to save more money for your retirement without actively thinking about it.