Keeping on top of your finances can be difficult. There are so many different things you have to think about when making a financial plan. Should you go with a bank or a credit union for your next loan? Do you want to save money or pay off debt? Using financial worksheets can help you gain some clarity when working to clean up your financial situation.
Money Worksheets Let You Visualize Your Financial Future
Using a financial worksheet allows you to map out your next financial move. You can see how much each financial decision costs. For example, you can use a credit card money worksheet to determine how much you save by paying more than the minimum payment.
Seeing the impact of each financial decision you make can allow you to change your habits. Let’s say you bought a car for $10,000 with an interest rate of 12 percent. Your credit score was 620 when you bought the car.
You will pay roughly $12,000 for the car assuming you make the payments on time. Increasing your credit score to 700 could allow you to get an interest rate as low as 5 percent. You may only pay $11,000 for that same car in the future.
Creating a money worksheet for your debt will allow you to make a plan to improve your credit score. Paying past due bills, paying down your credit card and settling debts are all ways to make this happen.
Save Money Or Pay Down Debt?
People are often stumped when it comes to answering this question. Some feel it is better to pay down your debts first. Others believe it is better to save money if you can afford your payments. Money worksheets will allow you to see how much each option costs you.
Say you have a credit card with a balance of $25,000. The interest rate on the card is a whopping 30 percent because you missed a couple of payments. Your monthly minimum payment will be around $1,875.
Paying $1,000 over the minimum means you are putting $2,250 a month toward the principal balance. You will have your debt paid off in roughly 11 months. You also save because you are paying no interest for nine months.
Sticking to the minimum payment each month will have your debt paid off within 20 months. Saving $1,000 a month will give you $20,000 in the bank. However, you have to consider the extra interest you will pay.
Your decision will be based mostly on your current financial situation. Someone making $25,000 a year may have a different plan than someone making $65,000 a year. The point is that you are mapping out the consequences of your actions. This helps you make better decisions as time goes on.
Those With Good Money Skills Can Also Benefit
Major purchases such as a home take careful planning. You have to have your finances carefully mapped out if you want to get a mortgage. Using a money worksheet can put you on the road to home ownership.
You should get used to accounting for every dollar you spend. It is often a good idea to audit your budget every so often. Altering your budget is much easier when you are not facing financial difficulties.
Taking money out of your entertainment budget and putting it into your savings account can shore that up nicely. Renting movies from the video store as opposed to going out to the theater can save you quite a bit of money. Periodically reviewing your budget keeps you aware of where you may be overspending without even realizing it.
There are many good reasons why you want to use a money worksheet. Those with poor financial skills can visualize their future budget. People with good financial skills can use it to keep their budgets within their means. Having the ability to keep your finances in proper order will save you a lot of time and money down the road. Call today to speak to a representative about the benefits of debt relief. Fill out the form to see how much money you can save today.