You’ve spent big in December, and after being broke through January, here’s how you can take hold of your finances in February
The tips in our February financial calendar will help you deal with debt and get your money back on track. Use this financial to-do list for February to look at your debt and make a plan to improve your financial situation in 2020.
February Financial Calendar
Print out the calendar view of your financial goals, and use the list below to keep track of all the financial things you need to do in February.
1. Make a list of all the debts you have right now.
The first thing you should do in February is the easiest: make a list of all of your debts. Run an inventory of all your debt accounts to find out how much you owe in total, and make a list of each one with the amount you owe and the rate of interest. Here are some common types of debt:
Student loans
Balances on credit cards
Auto loans
Mortgage payments
Personal loans
2. Make a list of your debts and choose how to pay them.
Once you have a big picture of all the payments you need to make, you can choose between avalanche and snowball.
The Method of the Avalanche
With this method, you pay off your debts in the order of their interest rates, starting with the one with the highest rate. If you pay off the accounts with the highest interest rates first, you’ll end up paying less in interest over time. But high-interest accounts can take a long time to pay off because the balances are often bigger. If you can’t see progress, you might not be as motivated to keep working on getting out of debt.
The Snowball Approach
The snowball debt method can help people who need a little extra motivation because it makes them feel good. To do this, you have to pay off your debts in order of how much you owe, starting with the smallest. This lets you close smaller accounts faster, which may help you stay motivated. But in the long run, this strategy could mean that you pay more in interest.
Remember that each month, you must pay at least the minimum on all of your remaining debts, no matter which method you choose.
3. Figure out your debt-to-income ratio (DTI).
When you have a list of all your debt payments, you can figure out your Debt-to-Income (DTI) ratio. This number is one of the best ways to tell if you’re living within your means or not. Use the following equation to figure out your DTI ratio:
(Total monthly debt payments divided by monthly gross income) 100 = DTI%
In general, financial experts recommend keeping your debt-to-income ratio (DTI ratio) below 35%, so do what you can to keep your DTI ratio low.
Tip: You can check your DTI ratio and a number of other important financial health indicators right away with Turbo.
4. Set up automatic payments to accounts where you owe money.
Don’t miss payments because that will make your debt worse. Too many Americans make this mistake, which is a shame. Recent research shows that one in four adults in the U.S. are behind on their bills, and more than 71 million adults in the U.S. have debt in collections on their credit files. It’s easy to avoid making payments late or not at all. Set up automatic payments on all of your debt accounts to make sure you always pay at least the minimum each month.
5. Figure out three ways to spend less.
If you want to pay off your debt faster, you should cut back on your spending, especially on things that aren’t necessary. Look at your monthly payments and make note of any places where you can spend less. Here are some things to think about:
Don’t get takeout. Eating out eats up your money. Instead of getting takeout, you can save money by making your own meals. An added bonus? You can work on wasting less food, which will save you money and help the environment.
Cancel unnecessary subscriptions: If you’ve signed up for every streaming service there is, you might want to cut back. Think about which streaming channels you use the most, like Netflix or DisneyPlus, and cut the ones you don’t use as much.
You can make your own coffee: Don’t go to Starbucks every day. Instead, make your own coffee.
Want to know more? Check out our post about how to trick yourself into spending less. You can then use the money you save each month to pay off your debt.
6. Check on the progress of your debt
You can’t reach your goals if you don’t keep track of your progress, and the same is true for money tasks. Take stock of your debts at the end of each month. (Don’t forget that February has 29 days this year—Happy Leap Year!) Keeping track of your progress can actually help you stay on track. Every bit of debt you pay off will motivate you to keep going on your way to a debt-free life.
Last Words
You don’t have to decide that you’ll always be in debt. You can keep track of your money goals and get the most out of your money this year by using our financial calendar.
Would you rather plan your finances online? In three easy steps, you can make a copy of our monthly template that you can change:
Open our Calendar Template in Google Sheets
Choose “File” and “Make a Copy.”
Save to your own Google Drive if you want to make changes.
Check back with us in March to get your next monthly budget and list of things to do. Throughout the year, we’ll talk about a wide range of money-related topics and tasks, such as tax preparation, salary negotiation, investing, and more, to help you get on the path to real financial success.
Do you know of any other ways to pay back debt? Tell us in the comments below.
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