7 Great Ways to Improve Your Personal Finances
We all would prefer to have a little more money. While many of us believe that our income is what’s holding us back from the financial freedom we desire, our insufficient funds are often the result of our own spending habits and financial behaviors. There are small changes you can make that can have a monumental impact on your financial freedom.
- Keep Score
A lot of people fail to record their daily spending not out of laziness, but because deep down they’re afraid to be confronted with the numbers in black and white. It’s difficult to make meaningful changes to your financial health if you’re not keeping track of where your money is going. Start logging purchases so that you can get an idea of where you’re spending the most and where you could stand to cut costs.
- Stop Playing Guessing Games
You should always have a solid idea of how much something is going to cost before you pay for it. People waste a lot of money by failing to stay on top of bills and allowing late fees and surcharges to accumulate. A great way to avoid this is by utilizing prepaid bills whenever possible. For example, if you use a prepaid cell phone, you won’t risk late fees should you forget to pay your monthly bill.
- Avoid Debt Like The Plague
This one sounds like it should be obvious, but it’s something most of us struggle to overcome. When you’re struggling financially, the last thing you need is more debt. Don’t justify credit card usage by claiming you want the miles or points. Instead, avoid taking on any debt and try to pay for things outright with cash or a bank card. The only loans you should take on are for meaningful purchases, such as a home, car or an education.
- Talk To A Professional
If you’re sick, you don’t second guess your decision to visit the doctor. If you’re being sued, you wouldn’t think twice about consulting an attorney. Hence, you shouldn’t feel bad about talking to a financial planner if you’re struggling to manage your money and keep your head above water. These people exist for a reason and they’re a great resource to help you improve your finances and take back your financial freedom.
- Don’t Avoid Your Financial Problems
It’s a lot easier to ignore a debt collector’s call than it is to answer the phone and actually have to speak with them. No matter where you are financially, it’s better to tackle your problems head-on than it is to avoid debt collectors and other financial obligations. If you answer the phone, you might be able to negotiate your way to a smaller monthly payment. If you ignore the call, the problem is only going to get worse and worse.
- Reward Yourself, But Wisely
If you’re trying to get out of debt and back on the road to financial health, you’re probably thinking that it would be a bad choice to treat yourself to something nice. However, we’re not robots and we can’t function without the occasional bit of joy in our lives. It’s better to control how much you spend by planning for a small splurge than it is to deprive yourself until you become frustrated and end up spending more money than you intended to spend. Treat yourself with little luxuries to maintain your sanity.
- When In Doubt, Save It
When creating a monthly budget, many people will see any money they have left over after expenses at the end of the month as “free money.” While it’s nice to occasionally treat yourself to something small, excess funds should be put into a high yield savings account. Your new mantra should be “when in doubt, save it.” Don’t think of leftover cash as “free money,” but rather as money that will help you when you need it in the future.
Taking charge of your finances can be intimidating. Many of us didn’t learn about fiscal responsibility in school or at home. However, just because you’ve gotten off track in the past doesn’t mean that you have to be a slave to your finances forever. When you make smart choices and view financial freedom as a marathon rather than a sprint, you’ll find in time that you’re able to live life without constantly worrying about money.