Happy Money, a platform for unsecured loans in partnership with credit unions, advises consumers to evaluate their spending habits, reduce credit card debt and reinvest in savings, to reduce financial stress and maximize your money.
According to a recent Happy Money study, overspenders report 44.3% higher levels of financial stress than smart spenderswho spend less than they earn each month.
“Positive cash flow is associated with countless financial and psychological benefits“said Dr. Chris Courtney, cognitive neuroscientist and senior vice president of science, risk and analytics at Happy Money. “It is important to spend less than what you earn each month and find the right balance between savings and spending.”
To determine your smartest spending, Happy Money recommends taking inventory of why you’re spending and how it makes you feel: “Becoming a smart spender has many benefitsincluding a 98.5% increase in the likelihood of avoiding revolving credit card balances.”
Reduce revolving credit card debt
Happy Money data shows that Those who have no credit card debt experience almost 50% less financial stress than those with $5,000 or more in credit card debt. Americans with credit card debt have an average balance of nearly $7,000, according to LendingTree, which is why Dr. Courtney offers this advice.
“Put as much money as possible on the credit card with the highest interest rate and make minimum payments on the rest until the card with the highest interest is paid off. Ignore balances and focus on the card with the highest interest first. Mathematically it is the correct move.” Dr. Courtney said. “Or if you qualify for a debt consolidation loan, that can help you pay less interest over time.”
One such tool is Happy Money’s payday loan, which streamlines the process of paying off credit card debt with a single, fixed payment. Consumers can track their credit card debt in one place, eliminate the hassle of making multiple payments, and improve their FICO score.
· Americans face double challenge: reduced savings and more credit card debt
· Less than half of Americans have savings to cover emergency expenses for at least 3 months
· Where to put your money now that interest rates are high