Get Out of Your Financial Crisis In 6 Steps
Do you feel like you are stuck in a financial crisis and can’t get ahead? Don’t worry, you are not alone! Many people find themselves in a financial rut from time to time and feel it is impossible to change their situation. You can break out of a financial rut, but you can still regain the motivation you had before and move on. Don’t give up. Here are six simple, unique ways to improve your financial crisis and get on track so you’re not repeating your version of “Groundhog Day”.
1 – Go on a Cash-only Detox
Say NO to credit cards and go on a cash-only detox! One of the best ways to change your spending habits is to switch to cash. When you hand the cash over to pay, you are conscious of your spending. Put away the “plastic” and start using the envelope budget system. Create an envelope for each category: groceries, housing, insurance, etc. and divide the cash into the different envelopes. If you spend $400 in groceries each month, you will withdraw $400 in cash and deposit it into the groceries envelope. Once the cash is gone, it’s gone. This helps you to control your spending and live within your means.
(Estimated cash saved per month: $100 to $200)
2 – Cut Out the Small Expenses
Do you go out for a daily coffee? Save money by making your own coffee at home rather than buying one each day. If you buy coffee at a cafe, you can easily spend around $5 a day, and thus, $100/month, then $1,300/year. Commit yourself to making your own coffee at home and realize that you don’t need that extra expense. Put that extra money to debt or savings. This is an opportunity to save some money.
(Estimated cash saved per month: $100)
3 – Pack a Lunch Next Week
Starting next week, go grocery shopping and cook at home. You don’t have to brown-bag your food all the time, but if do it for five days in a row starting next week, you will get the habit of eating healthier and saving money. If you would’ve spent an average of $8 a day buying lunch, transfer that money to your savings account and start saving for your next goal.
(Estimated cash saved per month: $160)
4 – Automate Your Finances
Automate your finances and save time and money. If you accidentally miss a bill’s due date, it will cost you $25 in late fees. Consider signing up for automatic bill pay and pay all your bills on time. You can also set up automatic bank transfers from your checking account into your savings account to set a money goal. As an added bonus, remember that the best way to raise your credit score is to consistently paying on time.
(Estimated cash saved per month: $25 to $100)
5 – Get Cable for Less
If you want to keep your expenses at a minimum, find an affordable cable option that works for you and saves you money. The average monthly cable is about $100. Consider using internet streaming services that provides a selection of shows and movies for around $8 a month. For less than $10 a month, you have flexibility and the ability to sign up and cancel with no termination fees.
(Estimated cash saved per month: $92)
6 – Fill out Your Taxes for FREE
If you are a taxpayer with a simple tax return filing a 1040EZ, or claiming earned income credit and filing a 1040A, or itemizing your deduction with a 1040-A, you may file your taxes online for free and from the comfort of your home with H&R Block. You just upload your tax information easily and have the option to have your return check by a tax advisor before filing.
(Estimated cash saved per month: $100)
While it will take some effort to get out of a financial crisis, use the strategies listed above, and you may find that you are not repeating the same day over and over!
In the past, your IRS debt may have appeared on your credit report if the IRS filed a Notice of Federal Tax Lien against you. Starting in 2018, the three major credit bureaus will remove tax liens from consumer credit reports. However, lenders may still search public records for tax liens.
What's the cost of owning a dog, cat or other household pets? Find out with this handy infographic from H&R Block.
Do you have to pay taxes on your student loans if they’ve been forgiven? Learn whether student loans are taxable and get tax answers at H&R Block.