Improve Your Finances With These 5 Actions
1. Write out a budget and track your spending
If you aren’t keeping a monthly budget and tracking your spending, this should be a top priority for you this week. It has become very easy to do with all the different programs available online. One of my favorites is Mint.com. They allow you to connect your different accounts to track your checking, savings, investment, credit cards and even car and house value. Best of all, it’s free! I have been using Mint since 2009 and have set up my basic budget to track my spending. Since I have all my banks hooked in, it reads all the transactions automatically and then it starts categorizing them as it knows how. As you edit and change them, it learns and gets smarter. Because I’ve been using it so long, it knows how to categorize about 90% of my transactions correctly, which means I spend a lot less time fixing everything.
Mint is a fantastic tool to help you get an “at a glance” view of your budgets and your spending. Try setting it up this week and see how have been spending your money over the last few months.
2. Challenge yourself to not spend money on a certain thing for the next 7 days
This one can be fun or very tough depending on what you are limiting yourself on. Use these as suggestions, but find something that pertains to your spending patterns.
- Do you pick up coffee at a local coffeeshop each morning on your way to work instead of brewing your own before you leave?
- Maybe you go out for lunch at work each day instead of bringing leftovers.
- Do you live close enough that you could make it to work without your vehicle? Could you take the bus or even ride a bike?
- Stay home for the weekend instead of going out to eat. Have a potluck with friends instead of meeting at a restaurant.
If you want to improve your finances this week, try choosing one thing that you do out of habit that costs you and cut it out by finding an alternative. Take the money that you would be spending and use it in one of the next steps. Make sure that when you make your choice about what to cut that you have a plan in place to make it successful. Otherwise, you will end up upset and feeling defeated! Remember that the harder it is, the more reward you will get out of it!
3. Save some money out of your next paycheck to put towards a starter emergency fund
Use the money that you will be saving from our what you gave up and put it into building up your emergency fund if you don’t already have one. Most families couldn’t cover an emergency of $1,000 or more without using credit this month. Are you one of them? By building up a starter emergency fund, you will put some margin between you and using debt and when you have your next emergency, you will feel so much more relieved that you aren’t going further into debt just to do life. I would challenge you to see what you can cut from your budget to get that initial $1,000 put away into savings for you.
4. Pay extra on one of your debts instead of the minimum
Are you sick of having debt? Think about it for a minute. What kind of things could you do if you didn’t have all those payments hanging around your neck? Whatever you want! Take a small step this week if you’ve already built up your $1,000 starter emergency fund and pay extra on your debt to reduce it. $25, $50, $100 a month extra on your debt can save you quite a bit over the long haul. Reducing your debt to zero and building up savings and investments is how you become wealthy. The next time you are thinking about putting something on credit, write it down so that you can remember two or three years later what you’ve purchased and have been paying for all that time.
5. Find a way to earn money extra this week by working overtime, side hustles, or selling something
The last thing to do this week to improve your finances is to find a way to earn more. This could be done in many ways. See if you can pick up an extra shift on your day off to get overtime pay. If that’s not possible and things are tough, think about ways to earn money quickly on the side. For about seven months while we were finishing up building our 6 month emergency fund, I picked up a night time job delivering pizzas close by my house. Sure, I had to work almost every Friday and Saturday night, but that meant I was making money instead of spending it. My goal was to save some money and that income gave me the margin and extra cash to do it.
Lastly, look around your house. Do you have stuff laying around that hasn’t been used in a while? Put it up on Craigslist or have a garage sale. Stuff is just material. You can always get stuff later. By letting go of things, you will free up cash and then apply it towards making smarter financial decisions. Do this enough and later on you will be able to buy whatever stuff you want.
So there you have it, 5 actions to take this week to improve your finances. What will you do and how far will you get? Let me know you’re in by sharing this article below or downloading your worksheet for FREE.
I’ve set up a hashtag #ActionsSpeakLouder and I would love to see and share your progress as you get through and encourage you to search and join the conversation on the various social channels or even submit your financial journey story to us here in a guest post!
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