Advertising
Advertising

5 Small Decisions That Will Improve Your Financial Status

5 Small Decisions That Will Improve Your Financial Status

Whether you have a little or a lot of money, there are many things that anyone can do to help improve their financial status.

Improving your finances is not about making life altering decisions. You do not need to become the world’s most well-informed investor or to create a budget that is so strict that you live on nothing but potatoes. Healthy money management is all about those small steps that you take towards greater overall financial health.

The end of the year is the time that many people think about changing their financial position for the better. If you’re not ready for a big resolution, you can make just as much progress by making several small decisions that are aimed at improving your finances.

Advertising

1. Get Informed

One of the most important things that you can do to improve your financial standing is to be informed about finance. You do not need to become an accountant or find a financial guru. It is all about educating yourself in the places that matter most.

The process of becoming better informed about your finances has two parts. First, you need to understand your own finances. Having a clear picture about where you currently stand is essential for setting and achieving your financial goals. You need to know what you have, what you earn and what you owe. This basic knowledge will have a real impact on how you look at finance.

Second, you need to know more about the basics of finance. You need to have an understanding of the impact of good debt and bad debt. You also need to know about how interest rates can work with you and against you. Learning about the different options that you have for saving money is another good place to start.

Advertising

2. Set Real, Achievable Goals

If you’re not already setting goals, there is no time like right now to begin doing so. If you are setting goals, there is no time like right now to measure your progress so that you can improve. Financial goals are important when it comes to improving your finances. These goals give you something to work for. They also give you something to measure your success by.

Setting goals is all about setting achievable goals. To do this, you need to be specific in the goals that you set for yourself.

Let’s say that your goal is to save money or pay off personal loans. You need to know how much money you want to save. You also need to know how you want to save it. Do you want to set up a savings plan to save $500 a month? Or do you want to cut spending to save an extra $200 for extra expenses?

Advertising

These are two different types of saving and you would use different methods of achieving each goal. This is why it is so important to make your goals as detailed as possible Do not forget to keep your goals attainable. An unreachable goal sets you up for failure and often hurts not only your finances but your attitude about money.

3. Take Your Time

Taking your time is one of the most important decisions you can make about your finances. Rome was not built in a day and your retirement accounts will not be either. Choosing to think about your financial decisions is also a multi-faceted approach. First, you should make sure that you take time to think about your purchases before you buy them. This helps weed out impulse buys and helps you spend money in a health way. One great way to do this is to put the item in your shopping cart online and if you are still thinking about it the next day, you may actually need the item.

Secondly, you should take your time creating a financial plan. When striving to reach a goal, give yourself enough time to reach it. Trying to save too much, too fast is hard to do. Have patience with yourself and your bank account.

Advertising

4. Eliminate Things You Don’t Use

Everyone has at least one bill that they pay every month for a service that they do not use. Whether yours is a landline, a gym membership or a subscription service that you have not figured out how to cancel, take some time to declutter your finances. Eliminating even one thing from your monthly selection of bills can make a big difference on your monthly finances. More importantly, it teaches you how to let go of spending habits that are not serving you.

5. Set Up an Automatic Savings Plan

Saving is important yet it is not at the forefront of everyone’s mind. You can make a decision to automate your saving plan to help make sure that it happens. Even if you only transfer $20 a month into a savings account, every little bit helps you build up a little nest egg. It also makes you more comfortable with saving. It’s a win-win decision.

Taking these small steps towards prosperity can take your further than you’d ever imagine. Remember that you have your whole life to manage your finances, you do not need to accomplish everything today.

Featured photo credit: GotCredit via flickr.com

More by this author

8 Signs You Have A Strong Personality That Might Scare Some People How to Achieve Quick Success at Work Even If You’re Lacking in Clear Direction You’ll No Longer Be Fooled by Skillful Liars If You Know This Concept How I Kill Boredom at Work to Regain My Productivity This Is Why Classical Music Lovers Are Smarter

Trending in Money

1 How to Nix Your Credit Card Debt in Less Than 3 Years 2 Top 5 Spending Tracker Apps to Manage Your Budget Smart in 2019 3 How to Use Credit Cards While Staying Out of Debt 4 How to Use Debt Snowball to Get out from a Financial Avalanche 5 How Personal Finance Software Helps You Get More Out of Your Money

Read Next

Advertising
Advertising
Advertising

Last Updated on April 3, 2019

How to Nix Your Credit Card Debt in Less Than 3 Years

How to Nix Your Credit Card Debt in Less Than 3 Years

Debt is never a fun thing to be in. But, there are many actions that you can take that will help you rid yourself of the burden of debt once and for all.

By coming up with a set plan, eliminating your debt can feel much easier than constantly thinking about it.

This post will provide some tips on how you can do this to help you nix your credit card debt in less than 3 years.

Hint: there are ways that are easier than you think.

1. Consider Consolidating Multiple Credit Cards If Possible

This may not be applicable to you, but if you have multiple cards – it is something to consider. Keeping up with multiple bills is time consuming.

It will depend on the balance you have on each. Consolidate ones you can but do not do it to the point that you get too close to the maximum limit. Also, it is ideal to pick the card with the lower interest rate.

Consider if there are any fees or alternatively, rewards, with transferring a balance to another card. Watch out for fees. Note that some cards offer rewards for transferring a balance to them. This is extra cash that can help go towards paying off your debt.

Advertising

Having one or two cards can make nixing your debt much simpler than keeping up with the balance of a bunch of cards. Keeping track of paying the minimum towards a bunch of cards is time consuming. Spend the time to consolidate instead to make the overall process simpler going forward.

My tip: Have one main credit card. Have a second one that you use for necessities – such as groceries or gas – that offers rewards for those purchases (a lot of cards do) and set the second one on auto-pay. You should be able to pay off a smaller amount on auto-pay if it is a necessity. If you think you cannot, then you may need to cut down a lot on expenses.

Why do I suggest doing this? Having one thing set to auto-pay is one less thing to think about. One less thing to waste time on. Same idea with consolidating to one main card. Tracking down too many is a hassle.

2. Try to Pay the Full Balance You Spent Each Month at the Very Least

You need to pay off the amount you are spending each month when that bill comes in. This is the amount you spent THAT month.

Do not let the debt keep accruing while you work on paying any unpaid debt that has accrued. It will become a never-ending battle. Try as best as you can to be current on paying for each month’s expenses when that month’s bill comes out.

If this is a strain, consider why. You may need to cut expenses. Or you may need to consider other cards. Or look at where this money is going.

3. Pay Extra When You Can – Every Small Amount Counts

This cannot be emphasized enough. If you are looking at a lot of credit card debt, it can look daunting, but each extra amount that you can put towards the debt will really add up – no matter how small it is.

Advertising

It does not just reduce the principal amount that you have left to pay off, but it reduces the amount that is collecting interest. You will always save money with that reduced interest.

4. Create a Plan on How to Pay Extra

Back to the main point, having this plan is giving you one less thing to think about.

This plan should be a plan that works for you. If it does not work for you, your spending habits, and your views on debt, then it will not be an effective plan.

For instance, if a set plan of an extra $50 (or another amount that you know you can afford) works for you, then do that. Set that aside every month and pay that extra amount. Treat it like a bill. Choose an amount that works for you and pay it like clockwork as though it was a bill you had to pay each month.

Little amounts will not nix it entirely, but they will help tackle it and having a set plan can make it less of a chore. Creating a new plan of how much to put towards it each month is an unnecessary added stress.

5. Cut out Costs for Services You Do Not Use

If you are signed up for subscriptions that you do not use because of some free trial or for some other reason, cut it out. Your overall financial position will look better.

In turn, that will make cutting your credit card debt easier. Look at your statements to find these expenses. If you do not use them, you may forget you are paying some unnecessary amount each month. Cutting it out can really add up in savings that you can put towards other needed expenses.

Advertising

6. Get Aggressive About It

Consider these points:

Depending on the interest and the level of debt, you may need to give up a few indulgences. For example, instead of ordering delivery or going out to eat, cook at home. Everything adds up.

Other things may be more of a sacrifice. It may be a trip you wanted to go on, or a daily latte habit you’ve picked up. In these instances, consider how important it is to you and if it’s worth the sacrifice. And if it is a costly expense, think whether you can wait to indulge.

Cutting an extravagant expense can really help make a dent in your overall debt. Try not to add to debt when you are trying to pay it off. It will be a never-ending battle. Make it less of a battle with these tips and it will feel easier.

Bottom line: Do what you can to make this process easier for you. Implement steps that do this. It takes time now, but will help overall. Also, keep track of your spending and paying down of your debts. Which is the next point.

7. Reevaluate Your Progress at Set Intervals

Doing a regular check-in can help you see your efforts pay off or maybe indicate that you need to give this a bit more effort. If you check every 3-6 months, it will not feel so much like a chore or feel so daunting.

By doing this, you will be able to better understand your progress and perhaps readjust your plan. Bonus: if you see it pay off, it will feel great to do this check-in. You will get there.

Advertising

Finally (and most importantly)…

8. Keep Trying

Do not get discouraged. Pushing it off will make it worse. Just keep trying.

Once your debt becomes lower, each monthly payment will reduce the balance more. Why? You are paying less towards interest. It will be a snowball effect eventually and it will become much easier to manage. Just get to that point. And know once you do, it will feel easier and motivating.

Start Knocking out Your Debt Today

The best way to eliminate debt is to get started right away. Begin by implementing the above steps and watch your debt just melt away. Try out some of the above strategies and see what works best for you. Soon you’ll be on your way to a debt free life.

More Resources About Better Money Management

Featured photo credit: Pexels via pexels.com

Read Next