Have you been trying to boost your finances without much luck? The truth is, improving your finance game isn’t easy. It takes time, energy, and sometimes even a great deal of trial and error. But that doesn’t mean it can’t be done.
Regardless of your income, there are steps you can take to increase how much money is in your bank account. Keep reading for five tips on how to improve your financial footing.
1. Assess Your Income
One of the best ways to boost your financial game is to make more money. Easier said than done, you say? Maybe, but don’t dismiss the suggestion out of hand.
One thing you can do is reassess your salary. How much money are you making in your current position? Does that number reflect the amount of work you put in and the value you bring to your organization? If not, prepare to ask your employer for a raise. Come to the discussion armed with evidence of money you’ve earned (or saved) the company and your record of successfully completed projects.
If your request is denied, you may need to apply for another job that better meets your financial expectations. With companies across the country desperate for employees, your chances of getting better pay are good.
Alternatively, consider getting a part-time job. In today’s economy, side hustles are a popular way to earn extra money. The best part is, they don’t have to be exhausting. For example, you could work as a Lyft driver or babysit on the weekends.
2. Apply for a Secured Credit Card
If your finances have recently taken a hit, your credit score may have suffered. In that case, consider applying for a secured credit card. It can help you improve your credit and reap the benefits of a high score. A better credit score opens up many doors, from saving you money on interest rates to helping you get approved for an apartment. The higher your score, the easier your life will be.
Secured credit cards work similarly to traditional cards, except they typically require a cash deposit, which becomes the card’s credit limit. Because of this cash deposit, secured credit cards offer less risk to the bank. If a user defaults on their account, what they owe is taken from their cash deposit. It’s for this reason that secured credit cards are more obtainable if you have bad or no credit.
As noted, a secured credit card isn’t too different from traditional cards. You can use it everywhere a traditional card is accepted. Most importantly, a secured card can help build your credit — provided you pay your bill in a timely manner. To maximize its credit-boosting power, make sure your card issuer reports to all three major credit card bureaus (Experian, TransUnion, and Equifax).
- Put Money Into Savings
A majority of U.S. consumers have a savings account, but not everyone actively puts money away. That’s a huge problem. A 2019 Federal Reserve study found that approximately 40% of Americans would have trouble handling an unexpected $400 expense.
One of the most difficult parts about saving money may be the act of saving. Whether you can’t decide how much to put aside or simply forget to transfer the money, saving doesn’t happen. And the longer you wait to start saving, the less money you’ll have when you need it.
Fortunately, there’s a solution. If you already have a savings account, use direct deposit or automatic transfer to move money from checking to savings. With direct deposit, you can divert part of your paycheck straight to your savings account. You’ll be saving money you haven’t even had the chance to miss.
An automatic savings transfer is similar, but the money is taken from your checking account and deposited in your savings. You’re able to choose the amount you want automatically deposited into your savings account and when. For example, maybe you want it taken out the same day your paycheck is deposited.
4. Review Your Monthly Spending
So you’ve considered how to bring in more money and ways to save it automatically. But if you really want your money to accumulate, you’ll need to take a good look at your expenditures. Where do you spend your money in a given month? Once you review your spending, you’ll be able to see where you have room for improvement.
Let’s say you pay $100 a month for a gym membership, but you only go once a month. You probably don’t need that extra expense, right? Go for a run around your neighborhood or check out online exercise videos instead. The same goes for your monthly rent, utility, and internet bills. If there are cheaper options for any of those, you should consider them.
In addition to paying less for necessities, look at where your discretionary spending is occurring. Chances are, you spend large amounts on things that are probably not necessary. Buying coffee every morning, for instance, can be expensive. While $5 a day might not seem like a lot, that can quickly add up to $150 a month. That’s money you could better allocate elsewhere.
5. Use a Budgeting App
Creating a budget and sticking to that budget can be challenging. Maybe that’s why so many people avoid it. A 2020 Mint survey found that 65% of Americans didn’t know how much they’d spent the previous month. This lack of knowledge is a financial disaster waiting to happen. While budgeting isn’t a laugh riot, it’s one of the best ways to maintain and grow your finances.
But how do you create a realistic budget? Sitting down with bank statements, utility bills, and pen and paper can be daunting. Luckily, these days you can use a budgeting app to help manage your finances. Mint, You Need A Budget, and Everydollar are just a few budgeting apps that will help you match income with outgo. That way, you won’t find yourself among the clueless 65%.
Boosting your finances takes time and work, but it’s well worth it in the end. What you expend in diligence and self-denial, you’ll get back tenfold in financial freedom and peace of mind.