Follow These Three Money Tips to Improve Your Finances
It’s no secret that many Americans still struggle with their finances. In fact, it’s estimated that the average American household has over $130,000 in debt, and about 70% of Americans have less than $1000 in savings.
Those are some pretty staggering statistics. And unfortunately for our generation, things are only going to get more expensive. The best thing you is is develop strong habits around money. Step one is to save. Once you have some savings under your belt, you can start thinking about making investments and building assets. That all said, here are some money tips you can use to improve your finances and increase your savings!
Develop your budget.
This one sounds so obvious you’re probably wondering why I’m even bringing it up. I agree it’s obvious, but very few people actually develop and follow their own budgets.
Think about your personal finances just as you would for a business. Just as you’d budget for a business, you need to separate expenses into “must haves” and “nice to haves”. And no that new pair of shoes is not a “must have”.
Once you’ve calculated your monthly expenses, you can start to get a better understanding of how much money you’ll need to bring in if you want to put some away. Make sure you evaluate after every quarter to check your spending. The ultimate goal is to steadily increase your monthly net earnings. If you see a decrease, it’s time to re-evaluate your spending or find an alternative source of income.
Be smarter about savings goals.
Settings goals in life is very important. Setting goals around your finances is a must if you want to get ahead. Studies show that the further away a goal seems, the more likely we are to give it up. This is because we start to doubt ourselves.
If you’re falling short of your goals time and time again, you’ll start to lose motivation – and that’s when things can really go south.
So what’s the solution? You need to be more strategic around the goals you set. Instead of focusing on the long-term ones, like buying a house or becoming a millionaire, you should focus on short-term ones as well.
Here’s an example. Let’s say you want to travel to Europe in six months. You’ve done some budgeting and find out you need $3000 for the trip. Instead of only focusing on the end-goal, break it down into six smaller goals each month. Take a look at your budgets, and determine what you need to save each month to reach our six-month savings goal. This way you can keep yourself on track, and feel a sense of achievement along the way.
Find a side hustle.
Building wealth is all about having money work for you instead of the other way around. If your only source of income is your salary, then you’re going to have trouble building serious wealth.
I’m not saying quit your job, but you need to find additional means of making money. That said, you should look to find a side hustle that fits your schedule. There are plenty of gigs that you can start from the comfort of your own home, so you really have no excuse.
Getting ahead financially is all about doing the work others “cant fit” into their schedules. The truth is, you simply need to grind harder. Nobody said it was going to be easy!