If your anything like me you probably spend at least a little time every day worrying about finances. You probably would also rather, given the option, worry a little less about them, and free up some energy to think about something else. Here are 10 easy steps to help you to improve your finances:
- Figure Out Where You Are At
First things first; where are you at financially? Can you afford the lifestyle you live? Do bills get paid as soon as they land on the table, or do they loom for weeks, accumulating until wage day? Are there any outgoings that could be reduced, and are there any extra income options available? These are all questions that will be useful to ask yourself, to work out where you stand, and how you feel about your situation. Many people would rather not think about it, myself included, but it is worth coming to terms with, rather than ignoring until it manifests as stress.
- Pay Monthly Outgoings
Many of our typical outgoings come by every month. For this reason we often come to despise them, but one advantage we have is that they are predictable. We can estimate how much our rent or mortgage charges will be, how much our gas and electricity, and phone bills might amount to. To make life easier it is often possible to arrange with companies, and estate agents, to have these payments sent out by direct debit on pay day. However you decide to do it, it is always best to account for these major outgoings, and get them paid as soon as possible.
- Plan To Chip Away At Debt
Debt can seem daunting, and let’s face it, no one wants to part with hard earned cash to pay off what they already owe. However painful it might be, it is important to make a plan to pay off any outstanding debt, even if it means chipping slowly away with small repayments. Debt can be a strong psychological barrier, preventing us from seeing our finances in a positive light. The sooner we can get out of debt, or at least see a way of getting out of debt, the sooner we can plan for savings, or for financial comfort.
- Get A Separate Savings Account
A savings account, AKA a piggy-bank as might be preferred by fans of the old-school, is a great way to put money away gradually, and at a rate that is barely even noticeable. We can either put money into it whenever we have some spare, or we can have a direct debit transfer money across accounts on pay day. Very soon the money adds up, and a holiday becomes a reality.
- Consider Your Income
How does your income look to you? If you are not happy with it perhaps it is time to consider what other options are available to you. It may be difficult for you to get a job, but it is important to keep up the effort, and search far and wide. Perhaps if you already have a job, you could consider a second income with a part time job, working from home, or finding freelance opportunity online. It all depends on whether you are happy with what you have coming in. If you are not happy, or you can see room for improvement, then there is no harm trying to earn more.
You have maximized your income, paid off your monthly outgoings and debts, and put away a little in the piggy-bank. A good idea now is to budget well. Think about what money you have left over, how far it needs to stretch, and what remains after the basic costs of living are covered. Then break the money down into a daily, or weekly budget, so that it is digestible, and lasts more comfortably.
- Live Within Your Means
We all want to experience a little luxury every now and again. And why shouldn’t we? But that does not mean it is a wise idea to live outside of our means. There is a vast difference between an affordable and well deserved treat, and living a lifestyle that we simply cannot afford. It is better to live comfortably, with the occasional treat, than to live on a financial knife edge splashing out for extravagance beyond what can be afforded.
- Cut Out Unnecessary Spending Habits
Bad habits are a plague on our wallet, and often on our health aswell. If you are struggling for money, but find that most of your spare income goes towards a habit that you would be better off without, such as smoking, drinking, or ordering takeout, then perhaps it is time to ease off, or give up altogether. Of course this takes willpower, but the benefits are ten-fold, and spare income will not go unnoticed. Along with our unhealthy habits are our spending habits; shopping and buying things that we do not need, sometimes just for the sake of obtaining something new. Learn to spend more consciously and wisely, and savings will be made overnight.
- Look Out For The Little Things
Most of us account for the larger costs of living. We know that our rent is due, or that our gas company happens to charge scandalous rates like every other gas company. What we sometimes forget are the little things; the everyday buys that don’t even cross our mind at the time; the couple of pounds here and there, the train fares that go unaccounted for, even if they cost $100 a week, the sandwich on the subway on the way back from work, which actually adds up $40 by the end of the week. The little things are often the pleasure boosts that help us through a tough day, so there is no need to cut out all of our sandwiches! But did you really realize just how much you spend on meatball subs?
- Have More Coming In Than Is Going Out
This is the dream financial state for anyone. For me it is far more important than being super-wealthy. When the income is exceeding the outgoing, and when all of the basics and costs of living can be comfortably covered, financial paradise can be realized. From planning, budgeting, and sourcing income, as well as cutting back on wallet-damaging costs, you can work out how this is possible for you.