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How To Clean Up Your Finances

The new year is here, and it’s time to look in the mirror and see how we can improve our lot in life. A lot of people will start the year with dreams of property ownership, but are limited by their financial capability. Let’s have a look at some practical solutions you can implement to get yourself on the right track.

Make Sure You Pay Your Bills On Time

Might seem like a simple suggestion, but you would be surprised how many people struggle with this. A good way to overcome is simply to pay the bills immediately once they arrive in the mail. This leaves you with no other alternative, and keeps it nice and simple.

An alternative structure is to set up automatic bill payment in your bank account. All banks offer this service via their online platforms, so unless using computers is a challenge for you this method is a sure fire way of making sure your bills are paid in a timely manner.

Get Rid Of Your Debt

The first school of thought on debt is to just always make sure you make your minimum payment, no matter what. This is definitely a requirement, credit providers don’t like seeing missed payments on your docket. When you go to apply for a mortgage the lenders will look at your debt servicing ratio, so it is important to keep this ratio as low as possible.

The second school of thought is to pay off your debt as quickly as you possibly can. This requires some belt tightening, but at this time of year that’s on everyone’s mind already! Getting rid of your debt completely is always the best possible scenario, that goes without saying.

Save For A Rainy Day

Automating your savings if at all possible is the best possible solution. In this day and age it’s difficult for people to put money aside, but if you’ve committed to it and it happens automatically there isn’t much room to spend. People are creatures of habit, and if you get in the habit of knowing that $250 is being put into savings every pay period it’s likely you will get used to it before you know it.

It’s important to have a fair amount of money tucked away when you are heading into the market to buy a property. How much is needed will depend on your credit situation, how much you are willing to borrow, how much the home you are looking to buy costs, and the closing costs associated with the transaction.

Get A Better Job

Loyalty is this day and age is kind of irrelevant. Most people expect that their employer has a certain amount of loyalty towards them, but that is often not the case. Everyone’s circumstances are different, but as a rule of thumb it’s always best to look out for yourself.

Advancing your career, and most importantly your salary, can help with all aspects of your finances. Getting rid of debt suddenly becomes much easier when you are earning $10,000 a year more, as does saving towards a down payment.

Listen To The Experts

Sometimes it’s best to learn from the pro’s, and when it comes to finances this is quite simply the truth. A qualified mortgage professional will always be able to give you great advice on the best steps to take towards home ownership.