As you watch the evening news, you are probably amazed and relieved at the many new steps that the United States is taking to initiate a large-scale economic recovery.

 Economists are now talking in terms of trillions, not billions, to revamp the economy. And the government is taking massive strides to rebuild the infrastructure, taking bold interim steps to provide millions of new jobs and offering direct financial help to many beleaguered citizens in the forms of stimulus checks, eviction moratoriums, extended unemployment benefits, and student loan forbearance.

Although you might have felt a little overwhelmed by the economic losses you suffered during the pandemic, now is a good time to turn things around in your own personal economy by getting rid of your credit card debts and improving your spending habits.

Restructure Your Debt Repayment

If you never seem to catch up on how many credit card bills you pay every month and appear to be falling further behind every month in catching up with your outstanding balances, it’s time to look for a new way to handle your escalating credit card debt.

An efficient way to restructure your debt is debt consolidation. This debt repayment method simplifies your debt by consolidating all your multiple bills into a single monthly payment. What’s more, you’ll pay an affordable payment at a lower interest rate.

Consult with a lender like Hawkeye Associates on how this consolidation process works. A credit counselor will explain exactly how consolidating your debts reduces your stress by simplifying the entire process of managing your bills. With the lower fixed interest rates, you will also be able to pay off your debt faster because more of your money will now go directly to paying down the principal.

When you’re no longer fretting about bills, you can turn your attention to more important things in your life.

Improve Your Spending Habits

One reason many people struggle with improving their spending habits is that they are not fully aware of where their money is going. A simple way to increase your understanding of your income and expenses is to create a zero-based budget.

Here are the essential steps to creating a zero-based budget:

  1. Figure out how much money you are receiving each month as income. If you only receive money from your job, then it’s as simple as writing your take-home pay. If you receive money from multiple sources, then it may require a little more effort to total up all your income.
  2. Learn the difference between fixed costs and variable costs. Calculate how much you spend every month on fixed costs, like rent and utilities, and variable costs, like grocery shopping.
  3. See if you have any occasional or seasonal expenses; these are irregular expenses that you pay only a few times a year.
  4. Finally, add up all your income, add up all your expenses, and then subtract what you owe from what you earn until you get to zero. If you have some extra money, put it in a savings account (what you owe yourself) to get your budget down to zero.

After you’ve set up your zero-based budget, keep track of your income and expenses through the course of the month to improve the accuracy of your financial estimates.

In conclusion, the world around you is changing for the better, and you should catch the wave and take advantage of the momentum to improve your own finances, too. The first thing you should do is to reduce your debt down to zero by consolidating your debt. And the second thing you should do is adopt a zero-based budget to control your spending.