Whether you’re just starting out as an adult or you’re tired of living paycheck-to-paycheck, there are many ways to improve your general personal finances and learn from the mistakes of others. It’s never fun to deal with an emergency and not have the money available to pay for it. Sure, you can take out loans and credit cards to compensate for these things, but the idea is to avoid digging yourself into a hole of debt just to get by. These five methods for improving your personal finances are easy, simplified and effective, and they can be beneficial for individuals and families alike. The key is to take your financial standing seriously and to work diligently to make changes.
Improve Your Personal Finance
Start Saving Money
Set a goal for yourself to save up $500 in a few months. Once you’ve achieved this goal, go ahead and start saving up for $1,000. The idea is to continually grow your savings account, which will give you a buffer if you ever experience a financial emergency. You never know when something unexpected will happen, and you need extra funds available to get rid of these expenses so that you’re not always relying on loans and credit cards. For example, you might be uninsured or have less-than-desirable insurance and get sick. You’ll be left footing the hospital bill and maxing out every card you have just because you’ve never been able to save up for it. Likewise, a simple automobile repair can become a major expense, and it’s nice to know you’ll have cash to compensate for these bills quickly. If you tend to forget to put money into your savings, set up an automatic transfer from your online banking account.
Plan for the Future
The reason a lot of people are living from one week’s check to another is because they don’t necessarily plan for the future. You have enough cash in the bank right now to bear the cost of bills, so what’s the big deal? The big issue is that you need to plan for future events that will require additional funds. This can be something like saving up for retirement or having an account specific to your child’s education. When you have a clear plan of what you need money for in the future, it’s easier to see why and how you need to start stashing cash away.
Refinance to Pay Off Old Loans and Debt
If you had to take out a student loan when attending a college or university, you know the frustration of having to pay it back after graduating. Unfortunately, most of these loans come with high-interest rates and awful repayment terms. You might find that a lot of your income is spent trying to get the loan paid off. The best way to go about reducing the bill is for you to refinance. Refinancing lowers your monthly payment, making it more affordable and less costly for you and your family. The same can be said about credit card debt. The average amount of debt for credit card users is an estimated $9,000. When you think of how much interest is added onto this amount, it’s no wonder people have trouble staying afloat financially. Consolidate those cards and try to get the amount that’s left paid as quickly as possible by applying more than just the minimum due.
Spend Your Funds Wisely
We all like to spend cash, especially when we’re out with friends or family. However, overspending can be a recipe for disaster when it comes to your overall financial standing. By becoming more frugal, you’re less likely to overspend, which will leave you with more money at the end of the month that can be put into a special account. There are some simple changes that you can make to avoid overspending. These include eating at home more often or finding free or low-cost activities in your local town or city. If you work near your job, consider biking or walking to work rather than taking the family automobile. You’ll eliminate costly gas expenses and avoid the everyday wear and tear to your vehicle.
Reduce Your Bills
There are probably a lot of bills that you receive every month that are unnecessary. There’s no reason to belong to five different streaming services and you don’t really need unlimited data on a phone that you only use occasionally. Take a deep look into your bank’s monthly statement and see which bills are coming out. Jot these down on a piece of paper and make notes of how often the service is used and how needed it is for the family. If it’s a service that only gets used occasionally, it might be time to cut it out altogether. You’d be amazed at how much you can save simply by getting rid of these unneeded services and subscriptions.