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 never really thought about all this until now. Now that my husband is in medical school. I feel as though following this advice is so crucial at this stage in our life
Gotta have a plan! Especially with someone in medical school! Hope you got your free checklist so you guys can work through the steps. Let me know how your journey goes and if you have any questions.
Thanks for this useful and informative article
Hi Sara, you are welcome! I hope you enjoyed it! Let us know how your journey through the 5 steps goes!
We use the Mint app to track all our finances. Works nice.
Mint is fantastic! I have all my budgets set up in there and use it to reconcile all my transactions into my categories and to also track my net worth. Thanks for posting!
Steven Goodwin recently posted…Improve Your Finances With These 5 Actions
These are some great tips! I love the worksheet. Luckily I am not in any debt, I am so careful with spending.
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Thanks, Let me know how the worksheet works out 😉 ! Glad to hear you aren’t in debt! Was it hard to get out of debt? Did you have a lot to pay off? What kinds of things did you have to sacrifice to make it work? Has it changed your mindset towards debt?
Those are nice ideas to save money. Bt as a person who doesn’t have a full-time job yet, I have few of my own XD
When I started college I bought a piggy bank. And every coin that did not get spent on coffee went in there. And once I started my part time job a part of that money went directly there too. I can say that my pig is quite fat now.
I thank you for stopping by and reading my little blog here. I hope you are able to land a job soon if you are seeking! I have 2 of those little piggy banks, well one is in the shape of a bottle. I put any change I get from anything in those for my two little girls. Then, when I want to do something fun for them, I use it to pay for it.
Glad to hear you’ve developed a nice savings habit! Good job!
We all should be budgeting. Most of us don’t. Not a hard concept though: Make more…Spend less…Easier said than done, right? Wonder why more people don’t take the time to “know our numbers.” These are excellent strategies to help anyone meet their financial goal! Thanks Steven!
Thanks for stopping by Candace. I think why some people don’t pay attention is because they make enough to be comfortable. But, most people get into trouble when there is a bigger emergency that they can’t overcompensate for and end up getting into debt because of it. Thanks for reading and commenting, it means a lot!
Tracking spending is so important! I’m really bad at doing that but I’m trying to get better in order to reach my savings goals this month.
Nellwyn, good for you! What is your savings goal and what are you doing to track and get to your goal? If you have any questions, I’d be more than happy to help you out!
This is all great advice! You are right. Actions speak louder than words!
Thanks Anita! I’m hoping more people will take more action because of this article! Thanks for stopping by and commenting!
When we actually write it out, it can be shocking to discover how much we spend. And where that money goes. Good advice in this post.
Yes it can but that can also lead to some of the biggest savings for next time when you learn from what you are doing “wrong”. Consistency is the goal! Thanks for stopping by and commenting Carol!
Steven Goodwin recently posted…Improve Your Finances With These 5 Actions
Steven, great job on this post! Finances are hard to understand sometimes. This was a very easy to understand post. Thank you. (I hate math/budgets!) I really liked #4! Student loans get my snowball ;).
Student loans were the bulk of our debt too. We had over $27,000 that we paid off. So nice to have gotten rid of those! Working through the debt snowball was tough but so worth it. Thanks for reading and for taking the time to comment!
I think these tips are really helpful! Most of the time, I always challenging myself to not buy “Wants” Things.
I think we all deal with that from time to time. We just went to our town fair today and we spent quite a bit, but it was budgeted out and we didn’t allow ourselves to go over. It would have felt good at the time, but I know we would have felt guilty afterwards when we were trying to reconcile everything. Thanks for taking the time to read and comment here. Have a great day!
Whenever people ask me how they can get better at finances or get out of debt I always tell them the first thing is to get on a budget. A lot of people want to hear some magic answer, but getting out of debt is simple – spend less than you earn and put the rest towards debt.
While I’m saying it’s simple I do understand that it’s not easy. It’s just that the people that I see that can improve their money just don’t want to follow steps like yours. They want that magic bullet. It doesn’t exist.
That is so true Vic! People just want the “easy” button that they can push and instantly have everything fixed. It’s not easy, but it’s worth it. I think if people put more priority on their finances versus their favorite hobby (even just by taking 30 minutes off of that hobby a week) then they can make huge strides. All you really have to do is have some self discipline and pay attention a little, and you can completely change your situation!
On a side note, I did buy my FinCon 2017 ticket! Hope you will be there as well!
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