Money is one of the leading causes of stress in this country. When people are struggling to make ends meet or they are worried about saving enough for emergencies or retirement, it can consume their thoughts and lead to poor mental health. Financial stability is beneficial to both your future and your mental wellness.
Unfortunately, not everyone can achieve financial stability. If you live in an area where the cost of living is high, such as Phoenix, Arizona, then paying your bills and having enough left over to save is challenging.
However, there are some tried and true methods for making smarter financial decisions to start saving more and have a brighter outlook for the future. Check out these six tips to start making smarter financial decisions.
Use Credit Card Rewards
Credit cards can be a helpful tool for financial needs, but they can also become a destructive practice if used incorrectly. Deferring payments by using a credit card is fine if you plan to pay back the full amount owed each month. One additional strategy to get the most out of your credit card use is to optimize rewards. Credit card rewards are common, often manifesting as cash-back percentages on certain purchases or points to use later on specific products and services. However, many credit card users have cards that do not allow them to take advantage of the right rewards. Find a credit card that offers a solid reward system and start taking advantage of better cash-back and points opportunities to save you money.
Owning Vs Renting a Home
Homes can be expensive in Phoenix, but they are also an investment. Renting your living space makes your money disappear each month, never to benefit you again. However, if those payments are for a mortgage on your house, you will slowly build equity in the home over time. That equity can eventually be used to take cash out during a refinance or make profits when you sell the home. Whether you take out lower-cost FHA loans or larger products like jumbo loans in Phoenix, the financial investment will benefit you in the long run.
Start Investing Now
The thing about investing is that it reaps greater rewards the longer you are doing it. That means if you wait to start investing until you are 50, your potential earnings will be significantly less than if you started when you were 30. There are a million different strategies for investing to increase your long-term savings. You could rent out part of your large home to students or young professionals in the city. You could get involved in a mutual fund and receive regular dividends. You can even trade on the stock market to take advantage of fluctuating prices and companies that are on the rise.
Consolidate Debt
Debt is a massive weight on your shoulders that significantly cuts down on your ability to save. Debt could come from student loans, credit cards, auto loans, a mortgage, and much more. Some of these debt sources have high interest rates that drive up your payments and increase how long it will take to pay them off. In some cases, you could consolidate your debt by paying off multiple streams with a personal loan that has a lower interest rate. This will reduce your monthly payments so you can save more while still moving toward a debt-free lifestyle.
Efficient Commuting
Heading to work every day can either help or hurt your finances. If you live within a reasonable distance from your workplace, then driving your car every day could be hurting your financial potential. Every mile means more gas expenses, and every use could accelerate wear and tear on the vehicle which will eventually lead to costly repairs. Consider commuting alternatives like carpooling, riding a bike, walking, or taking public transportation.
Drink More Water
How would drinking more water help you save money? In more ways than you would think. First, drinking more water is a healthy practice that will improve your body’s condition, which means a lower chance of disease and fewer trips to the doctor’s office. This will cut down on your healthcare costs. Additionally, drinking more water will help your body stay cool in the warm climate of Arizona, so you will be less likely to crank up the A/C and raise your electric bill. Third, drinking more water means you are drinking fewer beverages that tend to cost more. Water is essentially free at home, so fill up your reusable bottle and start hydrating to avoid spending more on other beverages.
Plan for a Better Financial Future Today
The steps listed above can all benefit you in the long run. Some are larger commitments while others can be started in the next five minutes. Making smarter financial decisions today will result in a brighter future, so do not wait to implement some of these practices.
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