Drastic changes such as getting money from a relative or getting a higher paid job aren’t completely necessary in order to enjoy better personal finances. All it usually takes for most people is improved money management where you reduce how much you spend. This enables you to save more money and invest which helps you to achieve your financial goals.
If you feel as though you’re in a tough financial spot where you feel stuck, there are lots of things that you can do to improve your situation and lots of other ways to settle a bill. We will now look at 7 tips that will help you to do just that.
1. Keep track of the money you spend
Many people don’t keep track of how much they spend every month and this is a mistake. You should start by becoming more aware of how much you spend in the different areas of your life by using an app such as MoneyTrack. This app is great for money management as it enables you to quickly see how much you’re spending on essentials and non-essentials. Some non-essential areas include entertainment, dining, coffees, etc. Once you become aware of your habits this will help you to improve them.
2. Budget on a monthly basis
You should create a monthly budget based on your spending habits and your income.
Now, you don’t need to create a very strict budget that includes huge and challenging changes such as never dining out, especially if you typically do so multiple times per week. Instead, make a budget that is in line with your lifestyle and the ways that you like to spend your money.
You can create your budget in such a way that it can help you to have better habits. This includes reducing how much you eat out so that you can cook more food at home. However, this should be realistic so that you can actually stick to it.
Check our downloadable guide to budgeting so that you can learn how to create a successful budget.
3. Always pay all of your bills on time monthly
One of the best ways to manage your money is to start by paying all of your bills on time. This will enable you to reduce spending, avoid late fees and ensure that you spend your money on the most important things first. When you have a history of always paying your bills on time it actually improves your interest rates and credit score.
4. Reduce recurring expenses
If you have any subscription services that you hardly ever use, then you should think about cutting them. This includes mobile apps, streaming services, etc.
It is best to check out how much you spend every month on these types of services and cancel the ones that aren’t necessary. This will enable you to keep more of your own money every month.
5. Save the necessary cash when it comes to large purchases
There are particular types of loans that are fine when it comes to huge purchases such as a vehicle or a house. However, when you have to make other types of large purchases, it is better to use cash since it is much cheaper and safer.
By purchasing via cash, ensures you don’t go into debt where you have to pay interest and end up spending many months and even years to repay.
6. Build a savings
Lastly, you should always have a savings and emergency fund that you can use when difficult and unexpected situations occur. Even if you don’t have much money to add to this fund, it can greatly help you to deal with financial difficulties and help prevent you from taking on high-interest loans or not being able to pay your bills.
In addition to this emergency fund, you should also have general savings to improve your financial standing and provide security against job loss. This type of savings should be done automatically to make it easier and ensure it becomes a consistent habit.