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Harris-Courage & Grady, PLLC Sept. 21, 2016

Many people go through periods of financial difficulty. We often hear from clients that concerns about money prevent them from sleeping at night. The best time to stabilize your finances is before difficulties arise, but even if you are in the middle of money problems, these strategies can help.

Seven Smart Steps to Stabilize Your Finances

  1. Make a Budget. Without a budget, it’s nearly impossible to stabilize your finances. You need to know how much you’re earning and how much you’re spending each month. A budget will help you ensure you never overspend. Making and keeping a budget should be your first financial priority.

  2. Build Your Emergency Savings. If you’re in the middle of financial distress, saving money can seem impossible. It doesn’t take a lot to get started. Even if you save only 50 cents each day, at the end of the year you’ll have nearly $200. That emergency savings will help prevent unexpected future expenses from disrupting your budget.

  3. Think of Ways to Reduce Your Expenses. A budget will be extremely helpful as you look for ways you could cut back. You may not need to make all the changes you identify, but it’s good to know areas where you could easily reduce spending to free up more money to put where you need it.

  4. Get Out of Debt. Debts are a source of tremendous stress for many. Stop carrying them around. If your debts are small, make a plan to pay them off. If your debts are overwhelming, give our office a call. We can help you make a plan to get rid of your debts permanently. Commit to stay out of debt in the future.

  5. Never Pay Late. Don’t spend more on your bills than you need to. Make a plan to pay everything on time. Set up autopay where you can. You’ll save money on late fees, and also improve your credit score.

  6. Carry Sufficient Insurance. Many of our clients have to file bankruptcy because they didn’t have enough insurance to protect them during a crisis. Make sure you have all the insurance that you need. It’s also a good idea to shop around periodically so you always get the best price for your insurance.

  7. Establish a Second Income Source. Everyone can use some extra cash. Think of a way you could use some of your free time to earn extra income. Start by putting it towards your emergency savings. If something ever happens to disrupt your main income source, you’ll have your savings and your other income to fall back on.

Everyone experiences financial difficulties at some point in their life. Follow these seven steps to stabilize your finances and you’ll know you can get through any challenges life throws at you.