According to the latest research, Utah is now the tenth-highest ranking state in the country for household debt. Our mortgages make up a huge percentage of that total, at 77%. If you’ve moved into a new home in Salt Lake City, how are your monthly payments shaping out? Without solid financial practices, you may end up calling a debt settlement lawyer to get you out of trouble. Here are some sound habits to develop as you manage your mortgage.
Work out your budget
Most people understand the importance of a budget, but as we grow older, more and more factors get thrown into the mix. When you’re busy with work, paying off student debt and a car loan, handling multiple lines of credit, and paying for other miscellaneous expenses, it’s intimidating to track everything.
Making a budget may not be easy or fun – but it’s essential to stay on top of your finances. Look up some strategies to make this task easier, and commit yourself to see it through.
Run the numbers
Take a look at the latest statement for your mortgage, as well as other outstanding loans you may have. Given the interest rates and outstanding balance, do the numbers on how much you can pay every month to clear your debts within a given timeframe.
The key here is to aim for something reasonable. You don’t want to pay off your debts in just two years if it involves starving yourself. Also, prioritize the high-interest debts so that you free up more money in the long term.
Increase cash flow
Armed with a clearer picture of your current situation and realistic goals, it’s time to go over your options and consider different ways to increase your cash flow. Depending on your current job, you may be able to earn more by taking on additional tasks and working overtime.
If that’s not an option, the modern gig economy in Utah makes it easy for you to tap into a variety of side hustles. You can rent out a room in your house, drive for a ride-sharing service, do freelance work, or tutor students online, among others. Find something you can realistically fit into your spare time without much fuss.
Make spending cutbacks
Go over your budget and identify the expenses which are significant and/or unnecessary. Each person has their indulgences, so just be honest with yourself and try not to feel any guilt or shame. You may want to skip buying a new pair of shoes every month, for instance. On the other hand, energy bills are a major yet essential expense – look to trim them with the right household practices.
Avoid additional debt
When you’re trying to get a handle on your finances, it’s not a great idea to take on more debt. Avoid taking out loans to pay for expensive new purchases – a new car, or a home improvement you’ve been planning, for example. Exercise your willpower and defer these until your debts are cleared.
Make extra payments
As you develop your financial discipline and manage to gradually implement your planned budget, along with bringing in extra revenue and smart cost-cutting, you’ll find some surplus each month. Put some or all of that bonus into extra payments on your mortgage – not only will this speed up your timeline, it clears your available cash and removes the temptation to splurge.
Managing your mortgage is a hefty undertaking. It takes time and discipline, along with smart practices. Have the right expectations and commit to the process to clear your debt.