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Home > Blog: Work/Life > Back on the Job? Restore Your Battered Finances

Back on the Job? Restore Your Battered Finances

Battered Finances

Today's guest post is written by Victoria, who offers insight and understanding from an experienced perspective on Since 2007, she has been producing online content for her clients and online audience, specializing in financial advice and ways to calculate interest rates.

Poor economic conditions, including unemployment rates near 10%, have forced many people who wouldn't normally do so to liquidate their savings and rely on credit cards to pay their bills. As the economy improves, and more people go back to work, rebuilding financial strength should be a top priority.
If you're among those who've experienced a financial battering, and you recently started a new job, here are three steps you can take to rebuild your finances after your new income reaches a steady flow:

1. Refinance your mortgage.

Mortgage rates are still low, but will likely increase over the next couple years. If you're getting back to work, you now have a reliable income stream and can take advantage of the low mortgage rates to reduce your monthly payment, possibly by hundreds of dollars.

2. Rebuild your savings.

Another important step is to rebuild an emergency fund that can pay several months' worth of bills. Aim to add to that fund until it contains about nine months of living expenses. To rebuild your fund quickly, establish a detailed budget and do everything you can to stick to it. Cut back on unnecessary costs such as trips to Starbucks, eating out, movie rentals, even magazine subscriptions and things you don't use. It may be difficult at first, but if you stick to your budget for a solid year, you'll look back and feel not only wealthier but also empowered because you will have tamed your spending. You may even reward yourself with a weekend trip to the beach.

3. Pay down your debt.

Next, target your credit card balances. Having a large amount of outstanding credit card debt can be financially devastating due to the fact that interest rates often exceed 20%. If this means cutting costs elsewhere for a little while, it will be worth it in the end. After you set up your emergency fund, pay down your outstanding credit card debt as quickly as possible to free up more income that you can either save or spend. While you're at it, shop around for cards with the lowest interest rates to cut your monthly interest expense.

One last tip to re-building your savings: Don't get discouraged about your current situation. Take control. Once you stop spending on things you don't need, you'll start to see not only an increase in your savings account, but also an increase of confidence, which can be more valuable than what you have in the bank.

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