It’s a great feeling to wake up every morning in a home you love while knowing that it’s fully paid off. You can sleep easy knowing that you have money in the bank and an emergency fund to see you through the lean time. Unfortunately, such achievements remain a distant dream for most people.
However, that doesn’t mean that such a life is out of reach for the average American – not by a long shot. With smart money strategies, such as those that entitle you to the best mortgage rates here in Utah, you can be well on your way.
Avoid spiraling debts
By the time they are clocking 35 years, most millennials in America owe an average of $42,000, most of which is consumer debt. Credit card debts account for more than a quarter of this amount, which is a whopping $10,500. The high cost of living makes it challenging to pay off the credit cards at the end of each month.
With the interest rate on most cards averaging 17.7 percent, the amounts owed on these cards pile quickly. Tuck on the fine and late fees and the sum swells with each passing month. Financial constraints cause many people to make minimum payments on each card, and this stretches out the debt.
Failing to arrest such a situation leaves you cash-strapped because the repayments end up taking a sizable chunk of your paycheck. As the amount increase, so do the minimums payable on the debt. Paying off your credit cards when they are due can save you a considerable amount of money.
Build a strong credit history and score
The end goal of building a strong credit history and a high credit score is that you get good terms when buying a home. However, you only get to achieve this feat by polishing your money skills. Good credit scores start at 700 with the excellent scores coming in at 800.
To build a strong history, you need to pay your bills and other financial obligations on time. That means you need to cultivate the rare ability to live within your means. The need to keep current with all your bills also makes you money conscious – which is an effective way to beat impulse buying.
Build your income levels
Under the 50/30/20 rule, experts recommend that you save at least 20 percent of your every paycheck. A deeply rooted savings culture lets you achieve your money goals quickly. However, building your income enables you to achieve the goals quicker.
If you’re carrying a mortgage, building your income lets you throw the extra money at it. Any money you pay over the monthly payments goes to paying down the principal amount. That not only enables you to pay off the loan quickly but also saves you a fortune in interest.
You need smart strategies if you’re keen to lead a happy and comfortable life devoid of crippling money problems. You need to espouse good money habits right from the get-go to avoid accruing expensive debts that will take much of your money with nothing to show for it.