Your desire to improve personal finance is a sign that you are maturing as a person. There can be a lot of reasons behind this motive. For one, you might have actually gotten tired of making do with your shoestring budget. It is not easy to constantly be pulling your check each month trying to make ends meet.
You might be coming out of college and want to get a grip on personal finance. Especially if you are starting to come to terms with your student loan amount. This was one of the trade-offs of pursuing higher education and even post-graduate studies. You haven’t even received your first paycheck yet you are already on the hook for your first payment.
It is also possible that you are at a life-changing turning point in your life. You might be holding onto a huge amount of debt payments that have accumulated over time. You are now considering debt consolidation but wary of your next steps will be. After you consolidate your debts, you want to improve personal finance in your life to make sure you do not go down into a tailspin of debt again.
These are just some of the reasons why you would want to have a better grip on your finances. However, a quick search online could bombard you with a variety of do’s and don’ts. You might even have a harder time trying to simply weed out the useless tips from those that you can actually use. If you are a bit tired of having to go through all of them, here are 5 useful and sensible ideas you can look into.
Take advantage of technology
Technology has grown by leaps and bounds and a lot of industries are taking advantage of that including the financial sector. What this means for you, as a consumer and a client, are tools and options that aim to improve the user experience. As such, technology can help manage personal finances making the task much more efficient.
If you are saving up for retirement, you can have a certain amount automatically deducted from your pay. You can also do the same with other funds like your emergency money. Just have it automatically deducted at certain intervals so you do not have to worry about doing it every time. This helps you grow your target funds automatically.
You can also log into your banking details and be able to monitor your accounts on the go. You can even use apps that can help you manage your budget and track your expenses anytime of the day. This can definitely help improve personal finance situations for you.
Simplify your budget
You might be thinking that the more complicated your budget is, the better it would work for you. So you go on and look for a template you can use. You find one that seems to have a lot of fields full of equations and data that promises you a deeper insight into your money management ways. However, you seem to can’t get ahead and spending a lot of time figuring out your template than actually using it.
There is nothing wrong with seemingly complicated budgets if you can use it to the fullest. If you are just starting out, it is best to stick to the very basics. List down all your expenses on one sheet of paper and on the other, your income. Next is you compare them side by side so you get an idea if you can meet all your payments or where you need to make adjustments. This is better as CNN shares that only about 40% of Americans actually use a budget.
As you might have heard people say, knowing is half the battle and that applies to your finances as well. The more you can pinpoint areas that need adjustments, the earlier you can make them before they cause damage to your finances. If a simple budget helps you do just that, then stick to it and gradually make improvements as you go along.
Improve personal finance with a frugal life
Living below your budget is one surefire way to get your spending under control. Once you are able to do that, you get to improve your money management efforts. This is because the less you spend, the more you can allocate your money to worthwhile funds. Rather than make unnecessary expenses, you have the chance to strengthen your reserve funds or even add to your retirement fund. You can be a bit aggressive with debt payments which can help you save interest payments down the line.
The challenge when you start to think about frugal living is the stigma that a lot of people have put on it. They quickly associate frugality with extreme forms such as dumpster diving. You need to remember that there are times where frugality simply means making home-cooked meals. It can even be staying at home with the whole family and watching a movie with eating popcorn you cooked at home.
Frugality can help improve personal finance because it gives you an avenue to be creative or learn a new skill. It forces you to think outside the box as you aim to spend below your budget. Of course, there are people who take this to the extreme but you do not have to go that far. You can always tailor fit your frugality to meet your lifestyle.
Keep your eye on the ball
One of the things that can help you manage your present finances is to never forget your long term goals. One reason for doing this is that it helps you put some perspective on your present financial decisions. It can help you push forward especially during trying and difficult times that can come unexpectedly.
Keeping in mind that you have to save up for a downpayment on a house can make your side gig a little more bearable. Reminding yourself that the reason why you are taking on a second job will help you pay off student loans can make things easier. Remember that whatever sacrifices you do today should tie up to future goals and help improve personal finance.
Look for ways to lower monthly payments
Fox Business shares that there is a big chance that 2017 could end with consumers tallying up over $1 trillion in credit card debt. What is troubling is that credit card debt only forms part of the entire mix of payments you might have on your budget. Once you add house payments, car loan, and even the ones for your basic needs, you could start to feel the pressure.
When this happens, try to focus on the things you can do to help you address the issue. First, take a look at what you are paying for everything monthly. Ask yourself if there is a way to lower them down. If they are utilities at home, start being more conscious of how you use water, lights, and even the thermostat. Any money saving tips can help lower down the monthly payments.
Debt payments can be a bit tricky but there is something you can do about it. For one, you can try talking to your lenders and exploring the possibility of a lower payment. It can either be with a lower interest rate or stretching your repayment timeframe. You can also consider debt consolidation to take advantage of a lower monthly payment on your debt obligations.
There are a number of ways to improve personal finance and you just have to look at what you can do at present and build from there. There is no overnight solution for managing your finances but the more you are motivated in changing for the better, the more successful you can become.