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6 Important Tips for Getting Your Home Finances in Order

6 Important Tips for Getting Your Home Finances in Order

When it comes to financial issues, people tend to get a little edgy, and rightfully so. There is plenty of advice out there that is somewhat unrealistic or takes things to an extreme (things like cutting costs by only having one vacation a year or firing your driver don’t exactly apply to the average citizen). At the same time, focusing on comical penny-pinching at the expense of basic human dignity—e.g. not flushing when you go to the bathroom, like some people advise—won’t make much of a difference anyway. Such advice only leaves you frustrated because online advice columns seem to mistake average working and middle class people, who have a lower income and want to make the most out of their pay check—with down-on-their-luck hobos.

The truth is that there are some changes you can make that will make a big difference in terms of your home finances, without sacrificing much in the way of comfort. I won’t lie to you—it takes a decent amount of self-control, planning and some effort to get your finances in order, but with a good strategy you won’t be giving up much.

1. Find a big, useful goal or item that is worth saving money for.

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Setting a goal

    It’s difficult to get yourself on board with spending less and putting some money aside if you don’t have a good goal in mind. You need to look for an effective source of motivation, something that will be in the back of your mind every time you think about making impulsive purchases. This can be something like a great vacation on a tropical island, a new car, home renovation or moving into a bigger house. The thing is, you can combine different goals, even something that’s not directly related to money—e.g. if you spend less money on sweets and soda, you will lose weight and have more money. You should always have that big goal in mind and think about how the money you want to spend on insignificant things in the spur of the moment can actually bring you a step closer to what you really want.

    2. Make paying off your debt a priority, but choose a good strategy.

    You can’t really take control of your finances until you have managed to free yourself of debt. This might seem like a long and arduous journey, and it is, but it can be done in a reasonable amount of time. First of all don’t fall for those minimum payments as they are designed to keep you in debt for a long time. Second, you have good strategies like snowballing, where you start paying off smaller debts first while keeping the rest at minimum payments, and you even have online tools available to help you out. It is important to exercise a little bit of control when it comes to spending money during this strategy—you don’t have to say goodbye to luxuries; just don’t go above your means and buy only what you can afford with the money that’s left over from the bills and payments.

    In case you are facing a lot of debt that you don’t know how to handle, you may need to negotiate with the creditors or even try a debt-settlement program. Make sure you do some research and find reputable companies that offer a good and reasonably priced service, as there are plenty of frauds out there that are only after your money. So, there are plenty of options for everyone, even in worst-case scenarios.

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    3. Start doing DIY projects around the home instead of going to the store.

    You’d be surprised at how many things you can fix, improve and make yourself around the house and save a lot of money on repair bills, cleaning products, new furniture, decorations and much more. It is fairly cheap to caulk windows and make small repairs. This combined with adding thick curtains and draft protectors can help you save some money on heating bills and keep you warmer in the winter. An old piece of furniture can be made to look brand new with a bit of glue, sandpaper and a paint job—I’ve had friends ask about my cool new table, after I had worked over the table that was sitting in the living room for 10 years and had put some wood grain print decorative paper on the top. Most of these projects are cheap and require nothing much than some hard work and creativity, yet they can look incredibly good.

    4. Plan your shopping carefully and stock up on what you need once a week or once a month.

    Shopping for groceries

      No one says you can’t go to a restaurant from time to time—just make it a less expensive one for the time being—or order a pizza. However, stocking up on food has its advantages. You will always have something in the fridge and pantries when you’re hungry and you won’t have to make trips to the store in the middle of your quiet time, which means you’ll also save some money on gas. You can go online and find some cost-effective brands for any type of food you need, complete with nutritional facts for the health-conscious.

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      There are also sales and special offers at stores you can check out online, as well as coupons that can be printed out. Buying in bulk can also get you a discount, and making fewer shopping runs and buying in advance can also help you manage your budget a bit better. Plan a big weekly store run for most of your groceries, and a monthly or even bimonthly run for household chemicals, hygiene products and canned goods.

      5. Cook your own food, and cook it in bulk.

      Take a page out of the bodybuilder playbook and start preparing your own food. It’s much cheaper to get a bunch of ingredients and prepare a dozen tasty meals than it would be to eat twelve meals at a restaurant. You have plenty of great recipes and cooking tutorials online, so it’s not all that difficult to become a decent cook with a month or two of practice. Cooking plenty of food at once and then keeping it in plastic containers in the fridge allows you to prepare enough food for the next 3–4 days in one go. This is great for healthy lunch recipes that feature fish, chicken or ground beef, combined with a whole lot of vegetables. Frozen vegetables are just as nutritious as fresh ones, and can be cooked fairly quickly.

      Not only will you be saving time and making sure there’s always a tasty and healthy meal ready to go, but you will be saving money on your electricity bill as you won’t be cooking all that often—you can prepare enough food for several days in about 60–120 minutes. If you’ve stocked up on food, it also means that you can throw together a sandwich or make some mac and cheese quickly when you want a bit of a change.

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      6. Go green and start caring about the environment.

      Green earth

        Yep, being a green-minded hippie can actually pay off. Caring about the environment is all about recycling, not letting the water run all the time while you shave or apply your shower gel in the shower, turning off the lights and TV when you’re not using a room, not heating up the house to tropical temperatures in the winter, being careful about your car’s emissions and so on. You might also recognize these things as some of the most common energy-saving and frugal living tips. Just start being more or less eco-conscious and you will soon notice that you are saving a decent amount of money; plus you’re being fashionably green instead of cheap in everyone’s eyes.

        Putting the reins on your spending and taking control of your finances is not a project—it requires a few major long term lifestyle changes. You simply can’t get around that fact or make things easy. What you can do is find the right motivation, create a good strategy that ensures that you will be covering your basic costs of life, slowly paying off your debt and setting some money aside, all while not entire giving up the comfort that you are used to. It’s just a matter of getting used to a different way of thinking and making smarter choices.

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        Ivan Dimitrijevic

        SEO Consultant

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        Published on November 20, 2018

        The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

        The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

        The truth is, there are many “money saving guides” online, but most don’t cover the root issue for not saving.

        Once I’d discovered a few key factors that allowed me to save 10k in one year, I realized why most articles couldn’t help me. The problem is that even with the right strategies you can still fail to save money. You need to have the right systems in place and the right mindset.

        In this guide, I’ll cover the best ways to save money — practical yet powerful steps you can take to start saving more. It won’t be easy but with hard work, I’m confident you’ll be able to save more money–even if you’re an impulsive spender.

        Why Your Past Prevents You from Saving Money

        Are you constantly thinking about your financial mistakes?

        If so, these thoughts are holding you back from saving.

        I get it, you wish you could go back in time to avoid your financial downfalls. But dwelling over your past will only rob you from your future. Instead, reflect on your mistakes and ask yourself what lessons you can learn from them.

        It wasn’t easy for me to accept that I had accumulated thousands of dollars in credit card debt. Once I did, I started heading in the right direction. Embrace your past failures and use them as an opportunity to set new financial goals.

        For example, after accepting that you’re thousands of dollars in debt create a plan to be debt free in a year or two. This way when you’ll be at peace even when you get negative thoughts about your finances. Now you can focus more time on saving and less on your past financial mistakes.

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        How to Effortlessly Track Your Spending

        Stop manually tracking your spending.

        Leverage powerful analytic tools such as Personal Capital and these money management apps to do the work for you. This tool has worked for me and has kept me motivated to why I’m saving in the first place. Once you login to your Personal Capital dashboard, you’re able to view your net worth.

        When I’d first signed up with Personal Capital, I had a negative net worth, but this motivated me to save more. With this tool, you can also view your spending patterns, expenses, and how much money you’re saving.

        Use your net worth as your north star to saving more. Whenever you experience financial setbacks, view how far you’ve come along. Saving money is only half the battle, being consistent is the other half.

        The Truth on Why You Keep Failing

        Saving money isn’t sexy. If it was, wouldn’t everyone be doing it?

        Some people are natural savers, but most are impulsive spenders. Instead of denying that you’re an impulsive spender, embrace it.

        Don’t try to save 60 to 70% of your income if this means you’ll live a miserable life. Saving money isn’t a race but a marathon. You’re saving for retirement and for large purchases.

        If you’re currently having a hard time saving, start spending more money on nice things. This may sound counterintuitive but hear me out. Wouldn’t it be better to save $200 each month for 12 months instead of $500 for 3 months?

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        Most people run into trouble because they create budgets that set them up for failure. This system won’t work for those who are frugal, but chances are they don’t need help saving. This system is for those who can’t save money and need to be rewarded for their hard work.

        Only because you’re buying nice things doesn’t mean that you’ll save less. Here are some rules you should have in place:

        1. Save more than 50% of your available money (after expenses)
        2. Only buy nice things after saving
        3. Automate your savings with automatic bank transfers

        These are the same rules that helped me save thousands each year while buying the latest iPhone. Focus only on items that are important to you. Remember, you can afford anything but not everything.

        How to Foolproof Yourself out of Debt

        Personal finance is a game. On one end, you’re earning money; and on the to other, you’re saving. But what ends up counting in the end isn’t how much you earn but how much you save. Research shows that about 60% of Americans spend more than they save.[1]

        So how can you separate yourself from the 60%?

        By not accumulating more debt. This way you’ll have more money to save and avoid having more financial obligations. A great way to stop accumulating debt is using cash to pay for all your transactions.

        This will be challenging, depending on how reliant you are with your credit card, but it’s worth the effort. Not only will you stop accruing debt, but you’ll also be more conscious with what you buy.

        For example, you’ll think twice about purchasing a new $200 headphone despite having the cash to buy them. According to a poll conducted by The CreditCards.com, 5 out of 6 Americans are impulsive spenders.[2]

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        Telling yourself that you’ll have the discipline to not buy things won’t cut it. This is equal to having junk food in your fridge while trying to eat healthy–it’s only a matter of time before you slip. By using cash to make your purchases, you’ll spend less and save more.

        A Proven Formula to Skyrocket Your Savings

        Having proven systems in place to help you save more is important, but they’re not the best way to save money.

        You can search for dozens of ways to save money, but there’ll always be a limit. Instead of spending the majority of your effort saving, look for ways to increase your income. The truth is that once you have the right systems in place, saving is easy.

        What’s challenging is earning more money. There are many routes you can take to achieve this. For example, you can work long and hard at your current job to earn a raise. But there’s one problem–you’re depending on someone else to give you a raise.

        Your company will have to have the budget, and you’ll have to know how to toot your own horn to get this raise. This isn’t to say that earning a raise is impossible, but things are better when you’re in control right? That’s why building a side-hustle is the best way to increase your income.

        Think of your side-hustle as a part-time job doing something you enjoy. You can sell items on eBay for a profit, or design websites for small businesses. Building a side-hustle will be on the hardest things you’ll do, be too stubborn to quit.

        During the early stages, you won’t be making money and that’s okay. Since you already have a source of income, you won’t be dependent on your side-hustle to pay for your expenses. Depending on how much time you invest in your side-hustle, it can one day replace your current income.

        Whatever route you take, focus more on earning and save as much as possible. You have more control than you give yourself credit for.

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        Transform Yourself into a Saving Money Machine

        Saving money isn’t complicated but it’s one of the hardest things you’ll do.

        By learning from your mistakes and rewarding yourself after saving you’ll save more. What would you do with an extra $200 or $500 each month? To some, this is life-changing money that can improve the quality of their lives.

        The truth is saving money is an art. Save too much and you’ll quit, but save too little and you’ll pay for the consequences in the future. Saving money takes effort and having the right systems in place.

        Imagine if you’d started saving an extra $100 this next month? Or, saved $20K in one year? Although it’s hard to imagine, this can be your reality if you follow the principles covered in this guide.

        Take a moment to brainstorm which goals you’d be able to reach if you had extra money each month. Use these goals as motivation to help you stay on track on your journey to saving more. If I was able to save thousands of dollars with little guidance, imagine what you’ll be able to do.

        What are you waiting for? Go and start saving money, the sky is your limit.

        Featured photo credit: rawpixel via unsplash.com

        Reference

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