The current market is seeing inflation and an increase in interest rates. This can affect your finances, especially if you are in debt. Hence, looking at your finances and working on efficient Hamilton financial planning can bring you to the right side of debt.
Here’s what you need to do to ensure your finances stay in great health while ensuring your debt is paid timely.
Outline a Budget and Cashflow
You must start by creating a budget and cash flow statement. Your budget will give you an idea of where you want your money to go, whereas a cash flow statement will tell where the money is coming in and where it is going. This is a critical step, especially when most people use cashless payments, making it harder to keep track of expenditures.
Differentiate between Needs and Wants
Most people are unable to differentiate between needs and wants. Needs include food, shelter, clothing, and more. Whereas wants can include anything luxurious that you might not even need. For example, buying a new car just because you never had one. This is a want, not a need!
Don’t Make Emotional Purchases
Most people consider shopping therapeutic. However, the long-term consequences of this can actually drain your financially and emotionally, turning you towards actual therapy. So, to avoid such a situation, make sure to avoid emotional purchases. If you are already in debt, emotional purchases can bring even more burdens.
Use Credit Cards Wisely
Ask any financial advisor Hamilton Ontario about using credit cards, and they will ask you to use them wisely. Credit cards mustn’t be seen as a replacement for debt but as a replacement for instant cash. Use credit cards only when you can return home and repay the short-term debt. If you can’t, don’t use credit cards.
Always Consider the Full Cost of Any Item
This is important if you are buying something using financing options. You need to consider the amount of money added to the original costs due to interest rates. If you know you can afford the increased costs over time, buy it. If not, hold your purchase.
Apart from these critical steps, you can also take a look at unused subscriptions and cancel them. You can redirect this money to repaying your debt. You can also ask for discounts and chances are you will find a great deal.
To know more about efficient financial planning and taking steps to repay your debt, get in touch with us at Lucky Idiake Financials. We provide financial planning, bookkeeping Hamilton, tax preparation services, and more to individuals and businesses.
Contact us now to know more.