You can thank yourself later (Credits: Getty Images)
It is easy to live in the moment, particularly when it comes to your finances.
The cost-of-living crisis means it is difficult enough to pay today’s bills, no matter thinking about what ‘future you’ might need.
However, making a few simple tweaks to your money management now could lead to a far more prosperous future, both in the next few years and in your retirement. Taking the steps below will have minimal impact on the quality of your life today but a big impact later.
Future you will thank you…
1. Deal with your debt
Unless it’s your student loan or mortgage you’ll want to sort it out fast (Credits: Getty Images)
If you have any form of debt except a student loan or mortgage, sorting it out fast will help you become financially resilient.
Missing a payment on any form of debt will also hit your credit rating, making it harder to buy a home or car in future.
‘Debt can get expensive, so it makes sense to tackle this first,’ says Claire Dwyer, head of investment companies at Fidelity. ‘You may have credit cards and personal loans, and often these come as part and parcel with high interest, which can really cost you in the long run.’
The trick is to deal with the highest interest-rate debt first, which is usually a credit card if you are not paying it off in full at the end of every month.
If you are in a financial position to do so, set up a direct debit that clears the entire debt each month on your credit card app so that you are not paying unnecessary interest.
If you cannot do this, think about how much you could put towards this debt each month and set your direct debit to this figure, rather than the minimum payment, so that you can pay the debt off more quickly.
If you have a good credit rating, it may be worth switching your credit card balance to a zero per cent balance transfer card, which would give you some breathing space to pay it off.
At present, there are several available that do not charge a fee to transfer your credit card debt and give you a year to pay it off without charging interest, including offers from Santander and Royal Bank of Scotland.
If you do this, make sure you put money aside for the debt every month and always make the minimum payment as you will otherwise end up paying interest.
If you have a personal loan, you could check whether you would face penalties for paying it off faster with any spare cash. If not, clearing this could also help future you to be more financially resilient. If you cannot face your debt alone, and feel you could benefit from professional help, take a step that could really give future you a boost and call a charity such as StepChange (0800 138 1111), which can give you free debt help and …read more
Source:: Metro
