loans - Tom Leydiker | Finance Blog

Establish Goals

The very first step is to establish your goals. Take a look at your current financial situation and set a realistic goal for yourself that you will be able to reach. Break down the goal into smaller digestible pieces that you can work on every day. Setting an overarching goal for yourself can be intimidating, but once it is broken down into smaller daily tasks that you can complete, the overall goal does not seem so daunting.

Spontaneity

Individuals who set financial goals for themselves find it difficult or unbearable to bind themselves to strict budgets. One aspect of your budget should be used just for spontaneous events that may come up during the week. Considering that last minute plans happen, it is a great idea to have a set amount of money that you can spend either each day or each week to help you stay on your budget. You will be less likely to falter on your budget if you have already budgeting frivolous spending!

Save First

The very first thing you should do when you get paid is to put money away towards your goal. You can decide whether you should manually put away the fixed amount or have it automatically taken out of your paycheck, so you never see the money in the first place. Whichever method you decide to choose, paying yourself first is the most important key to planning for your financial future.

Consider putting one-time payments such as tax returns, bonuses, or raises into your savings account. If you can function well with your current cash flow, then you have the opportunity to save even more with the added cash flow that comes from raises, bonuses, and tax returns.

If you are comfortable with the idea of investing your money, it is a great way to potentially earn more money for your financial goal and future. As with any investing, there is a varying amount of risk involved. Look into ways that you can intelligently invest your money to ensure the best returns!

tom leydiker telltale signs blog header

If you have ever consulted with a financial advisor, you know that borrowing money is one of the last things you should do, especially if you are trying to build up a strong credit history or investment portfolio.

However, there are certain exceptions to this rule. If you encounter a drastic or detrimental life event, are responsible for aiding your extended family in times of trouble, or suddenly find yourself inundated with bills, you should not feel as though you have no options or means of receiving help.

With that in mind, let us take a look at some telltale signs of when it is okay to borrow money:

When you cannot afford moving costs.

If you recently purchased a home, you may be faced with a plethora of expenses you had not even taken into consideration (i.e., storage, transportation, sudden repairs or renovations, etc.). Borrowing money in this scenario can give you great peace of mind while you are getting moved and settled into your new space.

When you are hit with large medical bills.

Unfortunately, no matter how young or healthy you are, facing medical expenses is an inevitability. Thankfully, there are ways to ease the burden of big medical expenses.

Now, credit bureaus allow patients 180 days to address their medical expenses prior to putting them on their credit reports. This gives individuals enough time to sort through their options and make the most educated decision possible – all without feeling rushed or uncertain of their financial standing.

When your car requires major repairs.

A lack of reliable transportation puts a major wrench in your plan to consistently earn and save money. However, if you are in a financial bind and require assistance to get your car back in working order, borrowing money is likely your best option. This will ensure you are still able to work and will even allow you to pay off your expenses at your own pace – a definite win-win scenario.

Regardless of your reason for borrowing money, it is imperative that you remember the importance of paying off your debt in a timely manner. Otherwise, you may end up paying more due to accrued interest than you would have if you budgeted your finances to make the largest payments you could manage – within the realm of feasibility, of course.