Escape the money binds and achieve your financial goals.
Do you feel that money slips out of your hands as soon you touch it? How many times have you tried to restrict yourself from overspending, only to pass by your favorite café and self-sabotage yourself?
Chances are, you’re feeling like anything you do related to money is not successful at all. It’s incredibly frustrating not to reach your goals, and it’s the same with financial management. If you feel like you’re under a financial curse, it’s high time to evaluate yourself and your finances to see what prevents you from attaining your financial goals and regulating your cash flow.
No matter how hard the times are, these seven tips will be able to get you started in whipping your financial management in shape-and break free of the curse on your finances.
1. Track your spending.
This tip may sound cliche, but it’s a hard-and-fast rule when it comes to financial management. Track your spending down to the very last cent! Don’t forget to do the same for your income; everything must be accounted for.
To avoid being overwhelmed, use categories for your spending, like groceries, eating out, gas, rent, etc. You can use an old-school notebook for this, an automated spreadsheet, or an app, whichever strikes your fancy. This tracking habit helps you gain spending awareness and lets you see your spending patterns to know which expenses to trim down.
2. Make a budget that’s realistic for you.
We have different needs and priorities, so it’s essential to make a budget that truly fits you and your goals. However, quitting cold turkey on your expenses (like coffee!) can have the opposite effect of what you’re after. Making drastic changes in your budget can lead to unnecessary splurges if not planned accordingly.
Ensure that your budget covers your essentials, a little treat here and there, savings, and a reasonable amount to cover the monthly payment if you have debts. Your budget should not make you feel overly deprived of the good things in life, or else it would fail.
This one is another hard-and-fast rule when you want to break free of the bonds of a financial curse. Save! Put away a specific amount right before you start spending. This practice might be a bit harder to do in the first few instances or so, but once you see your savings growing, you’ll know that it’s more fulfilling to increase your savings and hold out spending for gratification.
Your savings can help you when you have emergency expenses or a sudden job loss. Even if you save only small amounts, it will serve as your financial cushion when things don’t go the way they should. Have a hard time putting away a certain amount? Automatic contributions take away the hassle and temptation from saving money manually.
4. Pay your bills promptly each month.
Paying your bills on time ensures that you’ll never have to worry about losing electricity or the Internet at random times. You’re able to cover the essentials and focus on other spending areas. Doing this step makes for fewer chances of impulsive spending as you learn how to prioritize bills over wants. Plus, it helps your credit standing when you pay bills on time and lets you get better interest rates.
5. Get rid of recurring charges.
It’s nice to have subscriptions to mobile apps and streaming services, but if you find you’re not using them often, it’s time to let them go. These expenses rack up additional amounts, and if you’re having movie night only once in a week or so or rarely using paid SaaS applications, cutting them off from your budget can free a substantial amount that you can add to your savings.
5. Save money for big purchases instead of taking out a loan.
We feel you: it’s tempting to take out a loan so you can have your dream gadget or bag within your reach. Saving for big purchases, though, lets you get better deals as there is no added interest to pay. You need not worry about long-standing debt, either.
Although some purchases like a home or a car are better made with a loan, you’ll still reap more benefits from making cash purchases. One of these benefits includes better choices (like when purchasing a gadget). When you impulsively buy a device with a loan, it depreciates with use and is quickly replaced by newer models, no matter how high-end it is.
No one wants to work their whole life for wages, so passive income is a must. By having a sound investment strategy, you’ll be able to enjoy the perks of your labor while it generates more income for you. It is making your money work for you.
Check to see if your employer offers 401(k) matching, which essentially amounts to free money. Open a retirement account or explore other investment options that fit your budget and lifestyle.
By following these steps, you’ll better understand your finances and let go of old habits that rein you in and stop you from enjoying financial freedom and balance. It’s only hard in the beginning, but you’ll be surprised how you’ve broken the financial curse.