Improving your finances may have been on your past New Year’s resolutions list, bucket list, some-day-in-the-future list, but really, it can start right now. People often shy away from talking about or tackling their financial problems head on because it can be stressful and can make us feel shameful.
People often shy away from talking about or tackling their financial problems head on because it can be stressful and can make us feel shameful.
We’ve all been there at some point in our lives where we weren’t spending as smartly as we would like to. The good news is that you can make changes to your financial plans at any point and turn things around. Even if you are in debt, it’s not too late to get yourself on a better path. You can do this by making a few, easy changes to improve your
Even if you are in debt, it’s not too late to get yourself on a better path. You can do this by making a few, easy changes to improve your situation.
1. Make a Budget
The first thing to do should come as no surprise: make a budget.
Take an honest look at your monthly income and compare it against your monthly expenses. Filter out “wants” from “needs” and budget based on your needs.
Non-negotiables such as rent, car payment, and electric bills are a must in the “need” section which must be budgeted in, but other items such as eating out three times a week or getting your hair done once a month can be reassessed when figuring out your budget.
If you’re stuck, download a budgeting app such as Mint to assist you with all of your obligations and goals.
2. Create Some Financial Goals
The second thing you should do is create some goals both big and small.
Is there a credit card you’d like to pay off for good? Allocate your payments to concentrate specifically on upping your monthly payment.
Smaller goals can be as easy as saving twenty dollars a month. Set it up automatically through your bank to have this money transferred to your savings on a set day of the week. You don’t have to think about it and more than likely you won’t even notice it’s missing.
3. Cut Down on Expenses
Along with setting a budget for yourself, also cut down on your expenses.
Look over your bank statements for the past six months and look at the day-to-day items that may have been adding up.
- Are you stopping for a coffee every single morning? Invest in a coffee maker and try making your coffee at home. Only treat yourself to a latte every once in awhile.
- Have you been to the movies several times over the past few weeks? The cost of tickets plus concession stand food can quickly add up, so look for discount theaters and bring your own snacks.
You don’t have to completely cut out everything that is enjoyable for you, just cut back or make some compromises.
4. Take Note of Deadlines
Another area in which you can improve your finances is to pay back your taxes as soon as possible.
Now that Tax Day has come and gone, people find themselves with overdue taxes looming over their heads.
If you owe taxes and are having trouble figuring out the best way to pay them without spending your life savings, consider enlisting the help of a company like Community Tax to help you best decide. Tax professionals can often help you find credits you are eligible for you that you may not know about, as well as many other helpful items.
5. Track Your Spending
Once you have a financial plan in place, track your spending so you don’t fall back into old habits.
If it’s easier for you, take out a specific amount of cash each month that you have budgeted to spend for the week. Make note of exactly where you are spending your money and list it in the column of either “want” or “need.”
6. Create a Savings Plan
When you have paid down the majority of your debt, the next step is to create a savings plan. You might not be able to contribute very much at first, but over time you will be able to put more and more money into your nest egg.
If you are goal-oriented, a good visualization exercise would be to post a picture of your goal to your desk. This can be a dream vacation, new home, or paying off your car. Whatever your goal is, your savings will become easier if you can see it going directly towards your goal.
Don’t be afraid to take on the challenge of improving your finances. You can begin at any time and all efforts make you that much closer to financial freedom. Debt plagues millions of Americans every year, but it doesn’t have to. Employ a few of these easy changes and think of some of your own to help pay down your debt and build up your savings.