The fallout from COVID-19 undoubtedly made everyone rethink their finances. It has resulted in many looking into services to protect them from unexpected car worries, like a vehicle service contract (also known as an extended auto warranty).
Before the pandemic, 40% of Americans were already saying they’d have to borrow money to cover a $1,000 car repair or emergency room visit. Since the pandemic hit, in spring last year, very few people have been able to stay afloat and millions of Americans have been forced to defer their financial obligations because they’ve lacked a financial safety net.
We’re finally in spring, and now that we’ve passed the winter, we have more energy and willpower to get things done! We’ve gathered here 7 simple tips for better financial planning that you can start doing today.
1. Rethink your budget
Did you make a budget at the beginning of the year? Have you stuck to it? It’s not hard to make a budget, but it’s very hard to stick to it, and it happens to the best of us!
Two important rules to follow are these:
- Be specific about your goals.
- Be flexible.
If you haven’t been able to stick to the budget that you created earlier in the year, don’t let it discourage you. A budget should be reevaluated often to see what’s truly working for you. If you haven’t kept up with your beginning-of-the-year budget thus far, right now is the perfect time to think it over.
While you’re assessing the habits that you’d need to give up so that you can stay within budget, make sure your plan is sustainable. Don’t give up things you enjoy and that help you with your mental and emotional health to meet your budget. What you can do is simply reduce the amount you spend on them.
2. Order a credit report
Not enough people keep a close eye on their credit report.
According to a CompareCards report from late last year, only 33% of Americans have checked their credit reports in the past year. The reason is unclear, but perhaps it’s because a lot of people believe that checking your credit report negatively affects your credit score. But this is simply untrue. Checking your credit report does not affect your credit.
By U.S. federal law, you’re entitled to a free annual credit report. Get one now through AnnualCreditReport.
3. Evaluate your accounts and close all unnecessary ones
You may have music and video streaming accounts, gym memberships, online storage subscription (like that one Dropbox account you never use) and a variety of other services you’re paying for every month. A lot of them probably don’t get much use or don’t bring you any real benefits. Evaluate which ones are essential. Get rid of the ones that aren’t.
Read our blog on how extended car warranties subscriptions can really save you money.
4. Track your spending
Most bank apps have developed features to let you keep track of how you’re spending your money. There are plenty of apps that may help keep you on track with your specific goals for the rest of the year as well. Two of the most popular, easy-to-use budgeting apps according to Forbes are:
5. Pay with cash as often as possible
Credit cards can feel like you’re not really spending any money. In fact, studies show that on average people spend 12 to 18% MORE money when they pay with a credit card. That’s why it’s recommended you take the time to get cash out at the ATM as often as possible. Paying with cash gives you a better sense of how much you’re spending and may keep you from buying things you don’t need.
6. Set up an emergency fund
An emergency fund will protect you from unexpected financial surprises like a sudden medical bill, an expensive car repair or temporary loss of income. There’s a reason why a super common phrase repeated by financial advisors is “pay yourself first!”
To start your emergency fund, set-up automatic transfers from your checking account to your savings every month. Overtime you can get your money to grow by putting it into a high-yield savings account, money market account or a CD.
|Remember: A good emergency fund should cover at least three to six months of emergency costs.|
7. Use the snowball method to begin paying off debt
It’s normal to owe a balance on your accounts and make payments every month, but you don’t want to have to do this forever. Financial experts say one of the best ways to begin to pay off your debts is with the “debt snowball method”.
What is the snowball method to pay off debt?
The way the snowball method works is you evaluate all your debts and pay the minimum on all of them except the smallest debt, which is the one you try to pay off at once.
When the smallest debt is paid off, you roll that payment over to the next smallest and continue to pay them off one-by-one until you slowly rid yourself of all debts. The snowball method is a great way to see progress quickly.
How can Vehicle Repair Protection help you get your finances in order this spring?
It’s expensive to own a car, and almost every American household has at least one. Between the price of the car, the financing costs, car insurance, maintenance costs and repair costs, it’s a big financial burden. A vehicle maintenance plan can reduce the cost of maintenance by giving you exclusive pricing on routine car services. Vehicle service contracts, commonly known as extended warranties on vehicles, can also help you have better control over unexpected repair bills. These low-cost month-to-month plans can allow you to stay within your budget and still get necessary car repairs throughout the year.
Uproar.car has created vehicle breakdown coverage that is simple, trustworthy and affordable. Transforming the extended car warranty marketplace through technology and transparency, Uproar.car offers a full suite of worry-free, no haggle car care plans through low-cost, 100% online, monthly subscriptions that drivers can sign up for in less than five minutes. Get an instant quote today!