There is nothing as important as to take control of your financial situation and activities. If you do not take control of the financial situation, soon your financial situation will be so bad and you will not like it. There are so many ideas of what taking control of one’s financial situation may imply. The most important thing however is for you to ensure that you take a step, however small it may be.
Small Moves May be Proceeded with Big Changes
It is important for you to understand that you don’t have to entirely transform your financial situation for a significant improvement to be witnessed. There are so numerous small changes that one can make which may make your financial situation to snowball into enormous impacts over time to your advantage.
Just remember that you are the only one with the key to fix your financial situation thus having a better financial future. Below are fifteen methods one can employ to improve their financial situations.
1. Begin Using a Budget
There are many people who consider budgets to be factors that are limiting their freedom. If you want to have a better financial freedom in the future, ensure that you have a well detailed budget. No impulse buying should be encouraged. In short, tracking ones spending and living within a budget allows one to get used to a lifestyle that is within their budget.
2. Slash your Expenses and Spending
The perfect time to figure out why you have been spending more than you need to be spending is at the end of the year. Dig into you your bank statements and check to find out where the spending was unnecessarily low. How much do you spend on entertainment, groceries, transport etc and what is it that you can do to reduce such expenses. Make a budget that cuts all those extra costs and live within the budget.
3. Pay Yourself First
After you start saving, you will have money starting to pile up. The most appropriate thing is to pay you first by bumping up one’s retirement contributions or to transfer some certain amount of money to a savings account. You can as well do both.
4. Completely Dump Debt
List all the debts you owe others and prioritize them according to highest interest rate or size of the balance. After you have had a budget and started realizing much savings, start paying your debts from the highest prioritized moving downwards till you clear all the debts. In short, crate an actionable plan and get out of debt.
5. Get Right with Retirement
In case you have been borrowing money from your work sponsored retirement plan account, you are headed for trouble at retirement. At your savings rate, will you achieve your retirement goal? Discuss this with a financial planner and make appropriate steps to track your investments.
6. Contribution Beyond the Company Match is Paramount
If you fail to contribute the required amount in to your retirement plan account as per the company’s full match, experts will tell you that you have lost tens of thousands of money over your lifetime. Don’t waste this free money. Take full advantage of it.
7. Open some Health Savings Account
If you have a HDHP (High-deductible health insurance) plan, it is prudent that you save money for future health service expenses in the tax advantaged HSA (health savings account).
8. Shop for Health Insurance Coverage
If you have health insurance coverage, you will save a great deal of money when you fall sick. This is because the insurance company will take either partial of full responsibility depending with the terms of your insurance cover.
9. Begin Planning for College
Don’t wait until a year or some months to college time before you can save for your kid’s college. Do research to know about some of the college fee accounts such as the tuition prepayment plans as well as 529 plans.
10. Begin an Emergency Fund
There may be times of trouble when you need to take care of emergencies. Experts do advice that savings for such emergencies need to be enough to cater for six month expenses. You may lose your job, have economic issues in your business, fall sick, experience a car breakdown etc. with this fund; you won’t be in a crisis. You will also not have to go into your major savings accounts to solve the problem.
11. Begin a Fun Fund
Just the same way you have started an emergency fund as well as other funds for specific purposes, ensure that you have a fun fund. It is from this fund, and not from other savings, that you will be able to buy leisure goods and activities.
12. Ensure that You are Insured
Your insurance needs will definitely be changing and fluctuating throughout your lifetime. Ensure that you are properly and appropriately insured against all the eventualities that may surround you.
13. Shop Around for Virtually Everything
It is important that you shop around to getter service providers who offer better pricing as well as better plans on virtually every bill that are negotiable. These include household internet plans; cell phone plans satellite television packages among others. Don’t just buy anywhere.
14. Always Check your Free Annual Credit Report
Cyber crimes and identity thefts have been on the increase. This makes it important for you to frequently confirm that fraudulent activities haven’t been carried out using your credit cards and other identifications. Other than the Free Annual Credit Report, you can also regularly track your credit reports from sites such as CreditSesame and CreditKarma among others.
15. Begin a Side Hustle
In most cases, it is quite difficult to get along with the income you get from your fulltime job. Start a side hustle to supplement on this. You can make good use of your skills, start a small business or any entrepreneurship activities. If you are serious, you may end up earning more from the side hustle than from your regular fulltime job.
In a nutshell, set your financial goals and plan well to ensure that you surpass them by the set time.