Financial uncertainty creates stress that spills over into virtually all aspects of life: recreational opportunities, relationships, job performance, mental health, and more. Simply feeling poor can even notably lower your IQ score. If you’re struggling with challenging and unreliable financial circumstances, know that there are ways to have a more stable monetary situation. Use these five steps to help you achieve greater financial stability.

1. Track Your Expenses

Understandably, financial stress causes people to avoid looking at their money. They stop checking bank account balances, don’t track spending, and may not go get the mail because of bills.

If this describes you, begin by tracking all of your expenses. Record every payment, including automatic, online, card, check and cash payments. Make sure to include all essential and non-essential expenses as well -- track everything. Information is power, and you need to know where your money is going.

2. Follow a Budget

If you don’t have a monthly budget in place, no single action will have a greater impact on your financial situation. Although a budget might look scary at first, it ultimately will give you a greater understanding of and control over your money. 

To create a budget, list all of your expected income and expected expenses. You’ll likely have to prioritize expenses, especially making sure essentials such as food, clothing, shelter, transportation (car), and utilities are covered. Anything that’s not covered by income should be cut from the budget.

Actual income and actual expenses will vary from what you expected, and perhaps dramatically so during your first month of budgeting. A budget isn’t to dictate where your money goes, but rather to show you and help you think through decisions. It’s all right to make changes as the month goes on, so long as you think through the changes first.

3. Pay Bills on Time

Paying bills on time helps you avoid shutoff/cancellation notices, eliminate late fees, and have a much more financially stable situation overall. If you’re behind on payments, catching up so that you can make on-time payments should be your first financial goal. You might even get a part-time job until payments are caught up.

4. Eliminate High-Interest Unsecured Debt

High-interest unsecured debt primarily consists of credit card debt and payday loans. These types of debt charge a lot of interest, and there’s no collateral against them. They’re some of the biggest drags on people’s finances.

If you have any credit card or payday loan debt, pay this off as quickly as possible. After you’re able to pay all bills on time, any extra income that you can spare should be directed toward these debts.

5. Build Credit With a Vehicle Purchase

You’ll ultimately have to improve your credit score for more financial stability and opportunity, and one of the best ways to build your credit score is with a vehicle loan. Purchasing a vehicle gives you greater freedom and flexibility, and it’s an expense that should be prioritized (“transportation” in step 2). 

Purchasing a vehicle with a loan also allows you to rebuild your credit as you make on-time payments. Additionally, a loan lets you get a vehicle without too much initial expenditure. You should know what you can afford as a monthly payment at this point, as you’ve already tracked expenses and budgeted.

If you’re struggling financially, dealerships that have buy-here pay-here car lots can usually still help you get a car loan. They use the car as collateral, thus making the loan secured and available regardless of credit.

Visit First Start Auto

If you’re north of Salt Lake City, come visit us at First Start Auto. We’re one of the premier buy-here pay-here car lots in Ogden, Utah, and we have a great selection of cars. We also have a finance team that’s worked with many drivers who wanted greater financial stability. In other words, we have the cars and expertise to help you.