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10 Tips for Improving Your Finances

10 Tips for Improving Your Finances

The vast majority of Americans are only one $500 emergency bill away from being financially destitute. In fact, a survey indicated that 62 percent of U.S. adults could end up homeless if they skipped even one paycheck. Out of this group, only 58 percent believe that they could make up for an unexpected $500 expense by reducing their other expenses, using a credit card or borrowing money from a family member or friend. In other words, there are far too many people who currently do not have any type of safety net.

To help prevent yourself from remaining or falling into this trap, it is imperative to take a close look at your finances and make a few lifestyle changes. Fortunately, this does not need to be nearly as drastic as most people fear. By implementing even a few of the following suggestions, you should be able to build your savings account and begin more effectively planning for retirement.

1. Do an Audit of Your Bills

When was the last time you sat down and thoroughly looked through all of your bills? If you are like most people, you pay the minimum due amount on each bill without paying much attention to errors or interest rates. Auditing your bills can help you make sure that billing mistakes are not unnecessarily increasing your expenses. Additionally, a bill audit will enable you to learn how much money you would save in the long run by adding $10 to each of your credit related payments.

2. Purge Unnecessary Expenses

We all make choices regarding how to spend our money, and most of us have developed at least one or two unfortunate blind spots. For example, you may really like the version of yourself that goes to the gym once a month and continuously pledges to go more often, but this does not mean that you are making a wise financial decision by paying that monthly fee. Unless you are regularly utilizing something, it is best to purge the unnecessary expense.

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It is also smart to look at unrealistic expenses such as a beer budget that outweighs what you pay for electricity. If you are struggling to build a savings account or pay your bills on time, you must make difficult choices that will include cutting back or eliminating things that serve no practical purpose.

3. Contact Creditors to Renegotiate Your Repayment Terms

Many people erroneously assume that their interest rates and repayment terms are set in stone. However, the truth is that you always have the ability to call and attempt a renegotiation. In some cases, this technique may not get you anywhere. Overall, though, creditors are usually willing to work with people who have kept their payments up and express a need for a temporary or permanent alteration to their repayment terms in order to continue paying everything off on time.

4. Carefully Explore Your Trading Options

There are numerous trading options that can help you save for retirement, but you need to carefully examine everything before you make any large investments. The stock market can be very volatile, but there are some stocks that tend to stay more stable or have a better chance of rebounding quickly. Studying trends and talking to an experienced stock broker will help you make a better choice.

Binary options are another robust possibility that many people are not very familiar with. In a nutshell, binary options allow you to not only get involved in trading stocks, currency pairs, commodities and indexes but to also make predictions about how well they will do within a specified time period. If your predictions are accurate, you can earn a nice return on your investment. You can also use loss protection to prevent yourself from losing a lot of money when your guesses are inaccurate. In other words, binary options can be a viable way to earn some extra money for your savings account.

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5. Utilize High-Yield Investments

High-yield investments do come with a bigger risk factor than turning to treasury bills that have an almost non-existent return rate, but this does not mean that you cannot use them to your advantage. The younger you are, the safer it is to gamble on truly high-yield investments because you will have more time to recover any losses.

Please note that it is not wise for people who have a minimal savings account to invest everything they have into these investments. But if you put 10 to 20 percent of your savings into an investment that has high-yield results and a relatively solid history, you could end up cashing out with a significantly higher amount of money that can then be rolled into a safer opportunity.

However, if you want to play it safe altogether, a money market account should help you earn at least 1 percent annually on your savings. Once you achieve a savings of $50,000, this would provide you with a free $500 bonus after one year.

6. Optimize Your 401k

Your 401k options are probably diversified and very confusing, especially if your employer has put a few plans in front of you that do not come with a detailed description. When you add the recent turbulence of the stock market into the picture, it can become quite terrifying to invest money in this way.

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Instead of running away from this investment opportunity, take the time to more carefully examine your choices. You may find that the plans that are being pushed toward people in your age range are not right for you. After all, a conservative plan will not accrue much money, but it will also minimize your risk of losing everything you have contributed to your 401k.

7. Make a Weekly Savings Plan

In just one year, you can put together a savings account that will enable you to avoid any $500 financial disasters. $10 a week is all it takes to build up a savings account with $520 in it. It may seem unrealistic for people who live paycheck to paycheck to set aside $10 weekly, but you should be able to find this money by prioritizing your expenses and purging anything that is not necessary.

8. Build a Precise Budget

According to a Gallup poll, 68 percent of Americans do not build or use a detailed budget to help them manage their expenses. This is a major mistake that could seriously hinder your ability to get your finances on track. Instead of allowing yourself to spend money without having any idea if you can afford it, you need to sit down and build a precise budget every month. This budget should include everything from your major expenses to minor purchases.

By doing this, you will be able to see how your money is really being used, and this will make it easier to cut out unwise expenditures. Looking at this budget regularly and updating your check register daily is the absolute best way to keep yourself from spending money you do not have.

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9. Take Advantage of Free or Inexpensive Hobbies

We all need hobbies or a way to blow off steam. For some of us, this comes in the form of televised entertainment. The average cable bill has reached an astounding $99, though, so this is not a good way to scale back your expenses. Instead, you should consider cord-cutting measures such as Netflix or Hulu. For a fraction of the cost, you will be able to enjoy countless movies and TV shows.

Walking and many other physical activities are another free or inexpensive way to fill up your spare time, and they come with the added bonus of being good for your health. If you prefer to stay in and do something quiet, Scribd provides readers with unlimited access to eBooks and comic books for less than $9 per month. Adult coloring is another popular trend that has an initial cost due to acquiring the necessary supplies but will ultimately provide many hours of cheap entertainment.

10. Prioritize Your Personal Goals

We all have personal goals aside from the desire to not fall into bankruptcy over one medical bill. Prioritizing these goals can help ensure that you spend your money as wisely as possible. A good example is that some people buy a daily latte from Starbucks but then bemoan the fact that they cannot afford a monthly wellness massage.

If reducing stress and improving your health is your top personal goal, then it makes sense to skip your daily latte so that you can save up for a massage instead. Keep in mind that you could always make coffee at home for a smaller fee. This will give you a personal daily indulgence without derailing your goals. No matter what your personal goals are, you can achieve them in this same way by being smarter with your daily expenditures.

Now that you have access to several actionable tips, it is time for you to put some of them to work! You may also want to download some handy expense apps to make it easier to monitor your spending. With a little practice and some dedication, you can reach your goals and build a savings account that will allow you to avoid financial disaster during an emergency.

Featured photo credit: Piictures of Money via flic.kr

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Last Updated on January 2, 2019

How Personal Finance Software Helps You Get More Out of Your Money

How Personal Finance Software Helps You Get More Out of Your Money

Do you know what mental health experts point to as the biggest cause of stress in the United States today? If you said “money,” then ding, ding, we have a winner!

Three out of four adults today report feeling stressed out about money at least part of the time. People are either worried about not having enough money or whether they’re putting the money they do have to use in the best possible way.

Your money is either in charge of you or you’re in charge of it, there’s no middle ground. Using some type of personal finance software can help alleviate some of that money stress and better allow you to manage your money effectively. Without it, you may just be setting yourself up for constant financial worry. Life is already tough enough and there’s no need to make it more difficult by simply hoping your money issues will all work out in your favor. Hint: they won’t.

This guide will help you to understand how personal finance software can better assist with both accomplishing long term financial goals and managing day-to-day aspects of life.

Whether it’s tracking the savings plan for your child’s college fund or making sure you won’t be in the red with the month’s grocery budget, personal finance software keeps all this information in one convenient place.

What Exactly is Personal Finance Software?

Think of it like the dashboard in your car. You have a speedometer to tell you how fast you’re going, an odometer to tell you how far you’ve traveled, and then other gauges to tell you things like how much gas is in the tank and your engine temperature. Personal finance software is essentially the same thing for your money.

When you install this software on your computer, tablet, or smartphone, it helps to track your money — how much is going in, how much is going out, and its growth. Most personal finance software programs will display your budget, spending, investments, bills, savings accounts, and even retirement plans, levels of debt, and credit score.

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How It Leads to Financial Improvement

It shouldn’t come as a surprise, but people who regularly monitor their finances end up wealthier than those who don’t. When you were a kid, keeping track of all of your money in a porcelain piggy bank was pretty easy. As we get older, though, our money becomes spread out across things like car payments, mortgages, retirement funds, taxes, and other investments and debts. All of these things make keeping track of our money a lot more complicated.

Some types of personal finance software can help make things a little less complicated, setting you up to meet financial goals and taking away some of the stress associated with money.

Even if you already have a Certified Financial Planner (CFP) some type of personal finance software can be of great benefit. Whereas CFPs focus on the big picture of your money, they don’t handle the day-to-day aspects that determine your overall financial health.

It’s also not nearly as complicated as you might think and can take out a lot of the tedium that comes with doing everything on an Excel spreadsheet or with a pad and pencil.

Types of Personal Finance Software

When it comes to personal finance software, it generally fits into two categories: tax preparation and money management.

Tax preparation software such as Turbo Tax and H&R Block’s software can help with everything from filing income taxes to IRS rules and regulations and even estate plans. Plus, there’s the benefit of filing online and getting your refund check a lot faster than if you were to mail off your forms after waiting in line at the post office.

For the purpose of this article, however, will be focusing more on the personal finance software that aids with money management.

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Money management personal finance software will help you to see the health of your cash flow, pay down debt, forecast for expenses and savings, track investments, pay bills, and do a host of other things that 30 years ago would have practically required a team of accountants.

When to Use Personal Finance Software

So far we’ve gone over what exactly personal finance software is and how it can be a benefit to your money. The next logical step in this whole equation is determining when it should be used and how is the best way to go about getting started using it.

Below are four of the most common and practical ways to use personal finance software. If all or any of these apply to you and your money, then downloading some type of personal finance software is going to be a smart move.

1. You Have Multiple Accounts

There’s a good chance that when it comes to your money, it’s in more than one place. Sure, you probably have a checking account, but you may also have a savings account, money market account, and retirement accounts such as an IRA or 401k.

If you’re like the average American, you probably have two to three credit cards as well. Fifty percent of Americans also don’t have loyalty to just one bank and spread their money across multiple banks.

Rather than spending hours typing in every detail of every account you have into a spreadsheet, many programs allow you to easily import your account information. This will help to eliminate any mistakes and give you a bird’s eye view of everything at once.

2. You Want to Automate Some or All of Your Payments

Please don’t say that you’re still writing out paper checks and dropping each bill in the mailbox. While it’s noble that you’re doing your part to keep postal workers employed, we’re 18 years into the 21st century and you can literally pay every bill online now.

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There’s no need to log into every account you have and type in your routing number either.

With personal finance software you can schedule automatic payments and transfers between all of your imported accounts. Automatic transfers will help to make sure you have the necessary funds in the right account to ensure all bills are paid on the appropriate date. Late fees are annoying and do nothing but cost you money. It’s time that you said goodbye to them once and for all.

3. You Need to Streamline Your Budget

Perhaps the best feature of personal finance software is that it allows you track everything going in and out of your virtual wallet.

Nearly every brand of personal finance software out there has easy-to-read graphs and charts that allow you track every cent you spend or earn, should you choose. You might be pretty amazed when you see just how much you spent on eating out last month or if you splurged a little more than you should have on Christmas gifts last year.

Every successful business on the planet has a budget and using personal finance software can help you trim the fat on your spending in ways that affect your everyday life.

4. You Have Specific Goals to Meet

Maybe it’s paying off debt or saving for up something like a European vacation. Whatever your financial goal is, whether it’s long-term or short-term, personal finance software programs are one of the savviest ways to go about reaching those goals.

You can do everything from set spending alerts to notify you when you’re over budget to automating what percentage of your paycheck goes to things like retirement investments. The personal finance software that you choose should show you exactly how close you are to hitting those goals at any given time.

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How to Get Started

From AceMoney to Mint and Quicken, there ’s no shortage of personal finance software apps out there. Many of these programs are free to download and will allow you to pay bills, invest, monitor your net worth and credit profile, and even get a loan with the swipe of a finger.

Other programs may only offer you limited services and will require a one-time fee or subscription to unlock all that they offer. These fees can often vary from as little as two dollars to 50 bucks a month.

It’s best to start off with the free version and then gauge whether you’re able to accomplish everything you’d like or if it’s worth exploring one of the paid options. Often times the subscription programs come with assistance from financial planning and investment experts — so that can be a real benefit.

When deciding which personal finance software program to use, it’s also important to look at how many accounts you wish to monitor. Certain programs limit the number of accounts you can add. Be sure that if you have checking, credit card, and investment accounts to monitor, that you choose a service that can monitor them all.

Finally, when looking around for the right personal finance software that meets your needs, make sure that you’re comfortable with the program’s interface. It shouldn’t be expected that you recognize every single feature instantly, but if the features don’t seem readable and manageable to you, then you’re not as likely to use it and get the full benefits.

Final Thoughts

Personal finance software can go a long way in helping you to take control of your money and meeting your financial goals. It’s important to note, however, that some focus more on budgeting and expense tracking while others prioritize investing portfolios and income taxes. Explore several different programs and read reviews to find the one that’s right for you.

In this day and age, managing one’s personal finances in a secure manner that allows the user to have a real-time visual representation of their money is easier than ever before. With the numerous applications that are out there — both free and subscription-based — there’s no reason that every person can’t take control of their money and ensure they’re making smart money moves.

Featured photo credit: rawpixel via unsplash.com

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