8 Ways to Improve Your Finances
Sometimes, no matter how hard a person tries, there never seems to be enough money or resources available for oneself or for their family. Oftentimes, people complained about not having enough to support their financial needs but the irony is that they never really take the time to learn and plan for it. Improving your finances is a decision you have to make and commit to. It should not be left to chance.
Make a decision to improve your financial life. Ask yourself these questions and see how you can turn things around to improve your financial status.
How long do you want to stay in your current situation?
How do you see yourself in the next three to five years?
What can you change now to start the journey of improving your finances?
How do you want to experience financial freedom as soon as possible?
Try the following strategies to get started➡️.
1. Create a budget📝
Understand where your money is going. List your sources of income and all your expenses. Now, separate the fixed expenses like rent, utilities, car, etc. from the miscellaneous expenses like eating out, shopping, etc. As you go over your monthly expenses, you can identify the items that you can cut back on and see how much you can save.
You see, spending is a habit and so is saving. You can either keep spending unconsciously and not be bothered if you can pay for it or sit down and go over your finances and work on a budget. You can either live within or below your means or above your means. You always have an option.
2. Eliminate ❌ debt
Pay off your debt as soon as possible, especially your credit card debts. There are ways to eliminate your debt faster and one strategy you can try is the snowball method. Read this blog for more information about the snowball method. Another option is to speak to a financial professional and seek help on how to get rid of your debt faster.
3. Build an Emergency Fund🆘💵
The reason why the word emergency is in the dictionary is that it exists. It is just a question of "if" and "when" it will happen. Most people do not prepare funds for this and will rely on using credit cards or applying for a loan. Start by setting aside a portion of your income into a savings account and separate it from your monthly fund for expenses.
4. Invest for the future🆘💵
Have you ever thought about what will happen to you once you retire? Do you have the funds to support your lifestyle? How about funds for your children's education or buying your dream house? Take advantage of the rule of 72 to grow your wealth. This concept means that any rate of return divided by 72 will show you when your money will double. So if you have $10,000 and were invested in an 8% rate of return, your money will double in 9 years. Read more about investing here.
A Simple Guide To Investing During Uncertain Times
5. Seek professional advice👩💼👨💼
It wouldn't hurt to ask for help, especially If you don’t know where and how to start. Seek advice from a financial professional who can educate you about building your financial foundation the right way.
6. Get educated 🧑🏫📚
Learn to manage your finances by reading books, taking an online course, or attending workshops and seminars that offer topics about financial literacy. Learn how money works and manage your own money.
7. Review and assess regularly ✅📝
Keep track of your budget and stick to your plan to make sure you're on track to achieving your goal. If you have a financial advisor, work with them to do an annual review of your financial situation. It will always help to get insights from an expert.
8. Find other sources of income 💵
If you find that you’re in a deficit or if you want to achieve your financial goal faster, having an extra source of income will definitely help. However, having one does not mean adding more expenses. People oftentimes complained about not having enough, and there are only two reasons why it’s happening, either they spend too much, or they don’t have enough income. If it’s the latter, the only solution is to find another source of income - either a job, a business, or a side hustle. We are in the gig economy era where lots of people have side hustles. Depending on your situation, starting with a side hustle may be more beneficial than getting a second job, as you will have more flexibility and can have some tax advantages as well.
As your income grows, there’s always a temptation to increase your standard of living. This has been the norm for a lot of people but always keep in mind to work within your means. This requires discipline and it all boils down to planning and making a decision to stick with your plan. It wouldn’t hurt to try and live frugally. What’s the worse thing that can happen? Try to be more intentional in spending and you will see that there’s more value in doing this.
"Your life is the sum of all the choices you make every day ." -Unknown
✔️Try this:
Try saving $10 per day and with a 5% rate of return, it will come out to approximately over $123,000 in 20 years! Now, who will give you that much money?
Get in touch if you want a copy of the Personal Budget Template.