10 Easy Ways to Improve Your Finances

improve your finances

  1. Start saving
    It seems obvious, but many times it also seems impossible. By the time you pay your bills and have some spending money, every paycheck seems to fly out the window. The easiest way to save is to make sure you never have the chance to spend those funds in the first place. Most people have direct deposit these days; set up an automatic transfer of 10% of your net pay into a separate savings account each pay period. You won’t miss it, and it builds up pretty fast. When you get a raise, try redirecting the entire difference in your net pay over to savings. Your net pay will seem unaffected on your end, but your nest egg will grow that much quicker. You will be prepared for an unforeseen expense like an emergency car repair or for a “rainy day” when you want to take a long weekend out of town with friends.

 

  1. Make a budget – and be realistic
    Determine your starting point by keeping track of every dollar spent in a month. Now separate each expenditure into a category: utilities, housing, food (groceries), eating out, entertainment (movies, clubs, golf, etc.), childcare, transportation, car payment, and so on.Where are most of your discretionary funds going? See if there is anything you can cut back on or cut out altogether. If you have a wicked Starbucks habit, you might decide you can do without that daily grande latte after seeing that you are spending over $80 a month on coffee. Don’t want to quit your Starbucks habit cold turkey? How about only getting that latte once a week (say only on Fridays or Mondays) instead? Your $80 a month expense just went down to $16. You can’t decide to live on canned soup five days a week – you know it’s not going to happen, so don’t set yourself up for failure. Look at where your money has been going versus where you want it to go.

 

  1. Little changes can make a big difference
    As you saw, coffee can be a bigger expense than you realize. There are a lot of those little things that can suck money out of your wallet. Limit your dinners out each month. Make the transition less painful by allowing yourself one or two fancy dinners out, but eat at home the rest of the time. Pack your lunch. Join a carpool. Use a filtering pitcher, such as Brita ™, instead of buying bottled water. Feed a meter instead of using valet parking. Shop for clothes at consignment and second hand stores; you might even find higher quality items than in a big box store! Cigarette smokers spend hundreds of dollars a month on a product that they literally set on fire. That type of savings might make a lifestyle change a real incentive. It all adds up.

 

  1. Lower your existing monthly bills
    If you’ve always made payments on time, call your credit card company and see if they are willing to lower your interest rate. If you haven’t reviewed your cell phone plan in a year or more, it’s time to compare new deals and potentially cut your costs in half. Consider whether you really use that gym membership. If you barely go, it’s time to cancel it. Consider workout alternatives like YouTube videos or running groups. If a brick and mortar gym is where it’s at for you consider this; membership deals are generally better in the summer when everyone else would rather exercise outside. You could get those initiation fees waived or get a lower monthly rate.Shop for cheaper car insurance. Lower your electricity bill by using timers and power strips, and your water bill by checking for leaking faucets or toilets. Look into local weatherization programs that can troubleshoot conditions in your home to prevent wasting money on heating and air conditioning. Many times these programs are run by your utility company or local government and are free.

 

  1. Set goals
    Hard decisions are easier when you see the payoff at the end. Want to take vacation? Set up a retirement portfolio? Send your kid to college? Keep that in mind when you’re setting up your budget, or deciding if it’s really worth it to go to Olive Garden tonight, or if you really need yet another pair of black shoes.

 

  1. Check your credit reports
    The three major credit reporting agencies are Experian, TransUnion and Equifax. You are entitled to a free report annually or whenever you are denied credit directly from all three agencies. Look for mistakes and dispute them! This is even more important if you have a common name or share a name with someone else in your family. Check your credit report for bills you forgot about or never received. Maybe there’s an old bill from a dentist that got lost in the mail or never got forwarded when you moved. Even a small bill that went to collections stays on your report for 7 years after it is paid off. A low or lower credit score can mean increased interest rates or outright denial of credit when you need it most.

 

  1. Don’t pay full price – for anything
    Clip coupons; look for online deals, shop sales. Get discount codes from places like ebates.com, retailmenot.com, or slickdeals.net. Look for Deals of the Day on Amazon. Utilize discounts for services or experiences by using Groupon and Living Social.

 

  1. Change where you bank
    Many banks are rife with fees. Fees for less than a minimum balance. Fees for ATM use. Fees per check. Shop around, find a bank that values your business and doesn’t drain your account when you want to use your money. Veterans and business owners can often get even more perks, such as free certified checks or safety deposit boxes.

 

  1. Utilize employment benefits
    Your benefits package at work can offer a lot more than you think. Does your employer offer matching incentives for retirement account deposits? Flexible spending accounts? Free counseling or other wellness support programs? Take advantage of everything you can.

 

  1. Make sure you are financially informed
    Understanding basic concepts when it comes to investing, spending, saving, interest rates, etc. will benefit you (and your bank account) in the long run. Find out if your employer offers programs on these subjects, or seek them out yourself through online videos or books by consummate professionals in the field. If you have a personal accountant or financial planner, ask questions and ask for advice and heed it! You can’t make good choices if you don’t have the background information needed to make them.
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