If you are reading this article, it is probably safe to say that you don’t view your current financial situation as ideal. Your financial obligations are most likely preventing you from saving money, never mind being able to enjoy some luxuries like the occasional vacation.
Educating yourself on how money works is the key to unlocking a worry free financial future. You don’t have to be a money guru to implement some modest changes to your life that will dramatically impact your financial future. All it takes is a little bit of guidance on how to be more fiscally responsible and then the discipline to implement the advice. Here are 5 simple but clever ways to improve your personal finances quickly.
The first thing you need to do in order to improve your current financial situation is to accept that your current spending habits are fundamentally flawed. To achieve this you need to take a thorough look at your income and expenditure habits. As the experts on this website point out, you need to develop a better relationship with your money. Struggling from one end of the month to the next, with little or no cash in your wallet is a sign you lack any sense of financial responsibility.
Learning to operate a detailed budget is the only secure way of becoming more accountable for your spending habits. A detailed budget must include all income and expenditure. Operating a successful budget will involve paying your fixed expenditures or debts first and then learning to live comfortably within your means with the remainder of your money. A long-term goal should be to either increase your income or reduce your expenditure to the stage when you can comfortably save 30% of your monthly income.
As we mentioned above one of your long-term goals could be to save 30% of your income. But to achieve this from a 0% starting point will most likely involve setting a series of achievable short-term goals. Achieving these shorter-term goals will help your stay focused on the bigger picture.
Do you think it is more straightforward to earn more or spend less? Which of these can be achieved in the short term? The answer is easy, tightening your belt on a daily, weekly and monthly basis, is a far easier goal to achieve than increasing your income in the same timeline. Start with a routine expense that you can easily eliminate, then a weekly one and finally a monthly expense for example. If you buy a coffee every day on the way to work, you order a takeaway every Friday and you have a monthly cable subscription. How much will you save by just eliminating these three expenses.
The vast majority of your money goes on what are referred to as fixed expenditures every month. But don’t let the word fixed confuse you, it doesn’t mean they cannot change, it means you have to spend them. For example if you are paying rent, this is something you have to do to keep a roof over your head. But you can easily choose to live in a smaller, less expensive place. Every so often you need to make sacrifices in order to move forward. Utility bills also need to be paid and companies are always competing for new customers or trying to retain old ones. Shop around for a better deal, there is money to be saved.
We are in the digital age. Our technology can help us save money in many different ways. There are so many different websites and apps available to assist people manage money, claim discounts and coupons, understand finances and so much more. Make use of the many budget tracking apps, some of these you can link to your bank accounts and utilize them to track every separate transaction. This will allow you to track your spending and stay within your stated budget. There are apps that allow you to set your bank account up to save automatically. Two of the most popular are Acorns and Stash. These apps allow you to make savings every day, to ensure that at the end of every month a certain percentage of money ends up in a savings account. As you begin to learn to save, the next logical step is to invest that money. The internet allows you unlimited access to various trading platforms. More importantly there are many experienced traders who are happy to support you as you grow your wealth.
As you can clearly see you don’t need to implement any drastic changes in your life to improve your personal finances. It comes down to knowledge and mindset. Financial freedom lies in manipulating the information at your fingertips, in order to learn how to become a responsible spender, saver and investor.