As you manage your money better and reach for your goals in life, there is wisdom in making small financial steps rather than waiting to do it when you feel everything is perfect. You might be trying to wait to save money when you get some windfall money. However, you might be waiting for a long time and you are not even sure you will get it.
Here are a few areas in your life where starting small now can benefit you rather than waiting for the perfect time.
Save a little now rather than wait for windfall money in the future
Small financial steps mean saving what you can now rather than wait for a big amount in the future. You might be waiting for your tax refund check or even a bonus in the office. If they do come then they will help you strengthen your finances by saving more money. However, you can start saving whatever you can now. This is important since CNBC shares that almost 20% of Americans do not save anything from their paycheck.
When you are just starting out, you do not really have to put in a big amount. That will only put unnecessary stress on your finances. Take a close hard look at your budget and determine what you can set aside to save. Of course, this should come after you have paid all your financial obligations from debt payments to utilities.
Once you have determined how much you can save every month, it is a good idea to do it at the beginning. Take that amount out of your paycheck and put it in a separate savings account. This will help you avoid spending that money for unnecessary expenses. You might feel like you need it to buy something you want
Pay down your debt a little over the minimum
Small financial steps also apply to how you pay down your debt. The bare minimum is to pay your debt obligations on time and never below the minimum amount. However, you can make additional small payments to help you pay down your debt faster. If you have extra money in your budget, you can choose to save them or put extra payments on your debt obligations. Better if you can do both.
You can make additional payments even if they are not significant to your debt accounts to help you pay them down. You might be putting it off because you want to be able to put down a big amount of money to see your balance go down. The problem with this is that it might take you a long time to get a big amount to pay down your debt.
That is why it is a lot better to start paying down extra amount regardless of the amount because you are already getting started with your goal. The more extra money you have to put into extra payments, the better. You also have to understand that consistency is key when doing this. The longer you make extra payments, the faster you pay it off and the more money you save from interest payments.
Start moving rather than waiting for a gym subscription
You might have a hard time connecting this tip with making small financial steps but you need to know by now that your health is connected with your finances. The healthier you are, the more you can manage your finances better. It pays to start living healthy now than later because taking care of yourself has a lot to do with habit.
Habit takes a while to form because you need to get used to it. Much like putting on clothes every day or even brushing your teeth, it is a habit you develop over time from repetitive actions. The more you take care of your body such as exercising consistently, the more it becomes easier. However, you do not need to wait for gym subscription money or even for expensive classes.
You can start walking in your neighborhood for a few minutes a day. Add either the length or time for your walk. Once you are comfortable with it, start jogging and running around. This can already be a big help in keeping you fit and healthy. If you know how to swim, that is even better because is already a full body workout.
Make small steps towards your goal now
Small financial steps should also include your long-term goals. You might have this desire to put up your own business or focus on your hobby to earn a living. These are great objectives but the smart thing to do is to take a step forward towards that goal every single day. It is very rare that you get to leave everything behind in an instant and start following your dreams.
If you want to set up your own business, you need to start saving money and learning how to manage a business of your own. You can start reading books, taking classes, or even talking to friends and family who have started their own business. The idea is to learn as much as you can to help prepare you once you start with your own company.
Increase your retirement fund slowly rather than waiting for a big amount of money
Much like the first example, it is better to make small financial steps when saving especially when it comes to your retirement fund. If you are waiting to get started with it with a big amount, you could be losing valuable time already. As you play the waiting game, you are getting behind schedule and might have to retire past your target age.
It is better to start saving small every month rather than wait or years to get started with it. For one, you get to take advantage of compound interest while saving for your retirement fund. It can help your money grow over time. Think of all the times where you had to pay more than what you owe in your credit card because of interest and other fees. It has the same concept only you are using it to your own advantage.
Save for emergencies now
Much like how you need to save for your retirement with small financial steps, you need to consider doing the same for your emergency fund. It is important to start saving for the unexpected as early as you can regardless of the amount. The longer you keep at it, the bigger your cushion will be. You will be more prepared financially in handling emergencies.
The concept of starting early in saving for unexpected emergencies is hinged on the fact that you never know when you will need it. You might need some emergency repairs at home or for your car. If you rely on your photography for extra money and your camera breaks, you might have to get it fixed or buy a new one.
Small financial steps now are always better than waiting for things to get better. It puts you in a position to reach your goals faster as well as help you create that habit of doing what you can do now. Rather than waiting to have a big amount to save, putting aside small amounts now will help you save faster.