Every new year, we are afforded the opportunity to reflect on our progress and consider new resolutions moving forward. Our thoughts turn to what we might do this next year or perhaps explore what was NOT done this past year. Most things boil down to a simple yet primary concern…How Can I Improve My Financial Situation?
There are plenty of cliché slogans and phrases intended to motivate and inspire. Just do it, keep on trucking, get ‘er done. All of it is based on taking the first steps, making actions count toward a goal. Why not start now? Make this your year by doing what it takes to be financially successful.
This is not rocket science. It can be easy to make smart money decisions and develop consistent habits. But it does take a dedicated mindset, a personal desire, and focused effort. And we can help with these 5 Tips on How to Improve Your Financial Situation!
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1. Live Below Your Means
We live in a materialistic society, and many of our interactions are based in one form of commercial exchange or another. We are regularly bombarded by advertisements and upgrades, to services and gadgets and vehicles. These are all becoming more important to function.
A classic phrase, perhaps known better by your grandparents than your peers, is the idea of “Keeping Up with the Jones’.” Seeing your neighbors, coworkers, and family succeed is a double-edged sword. Most often, this tit-for-tat sequence will see you weighed down with obligatory payments for years. Credit card interest can cost hundreds of dollars, even beyond the 15% to 20% you’re paying beyond the initial fees. And without it, you’re still stuck with the monthly siphon regardless of how well your investment continues to function.
You are going to find yourself very limited in future options for growth and expansion if you have these chains locked onto your bank account and income. Bottom line is that you need to avoid the appeal of shiny things that you can’t yet afford. Patience will pay off, and this is one way to set attainable goals and improve your financial situation!
If you are interested in ways to take this path, you can start with 7 Tips for Living a Minimalist Lifestyle!
2. Have a Spending Plan
You should never be the guy I encountered at the grocery store the other day. He had a cart full of X-Mas gifts, and the slow pace of ringing the items up at the self-check-out was not the worst thing. Once the total was calculated, he had to pull out his phone to ensure that he had the balance to cover this purchase.
My girlfriend and I simply shook our heads, no longer in impatience, but now in pity. This was not in judgment, as we’ve both been at points in life where we could barely afford Ramen noodles. But we knew how broke we were, and how many noodles we could afford at any place in time. And we immediately agreed…the checkout stand with holiday purchases was the last place one should be unsure of their financial security.
Families and individuals who plan their spending find themselves graced with emergency funds, have no trouble paying bills on time, and don’t throw money away on interest or late fees.
This is not to make you miserable or deny you the pleasures you work so hard to earn. Rather, this is to make sure that you can afford those things when you want them. But you need a solid foundation to build upon, with a forward-thinking approach to your spending and saving.
Everything you purchase is attached to work that you must do first. If an item costs $500 but is half-off, don’t think that you’re saving $250. Instead, remember that you’re still spending that much, and again, there are work hours attached.
There are a lot of ways that you can adjust your habits and perspective on saving and spending. A quick review of your bank statement can show your history and may highlight things in a different light.
To improve your financial situation, you will want to seek professional advice, but in the meanwhile, you might consider these 10 Money Saving Tips That Can Save You Hundreds!
3. Have a Savings Plan
While you should consult with your personal banker, or even a financial advisor if you seek to invest, there are a couple of prime considerations when it comes to creating a plan for savings.
An emergency fund is of more immediate concern and something that should be among the first financial goals you set. You will need to examine what it would take to survive for 3-6 months should the worst things come to pass. This will give you confidence in setting other financial goals and your ability to achieve them.
Retirement is something that should be a priority as well, and can often be provided by (and contributed to) by your employer. A financial advisor can assist you if you don’t have such a plan available. While retirement may seem like too far in the future to be of worry, remember that you’ll want to improve your financial situation for tomorrow…and every tomorrow that comes thereafter!
4. Make a Plan for Paying Off Debt
Interest is going to keep you in chains until you forcibly remove them. Obligations will bind your wings and put you into a cage of your own making. Debt can very literally steal your dreams.
The easiest place to start is to review your relationship with Credit Cards. They can be a convenience if regularly maintained and come with a lucrative rewards package. If they are used properly, they can improve your credit and financial reputation.
…but not by living beyond your means; by maxing out your allowance and making minimum payments, you exhibit a lifestyle that will not earn you points with the institutions that can help you jump ahead.
Some debts are an investment in yourself and your future; these should still be considered very carefully, and as always, get the opinion of someone in the finance industry so that you can make informed decisions.
You must work to remove your debt as quickly as possible, removing one chain at a time until your financial security is your freedom.
Whether or not you currently have debt, you might also consider other ways to immediately improve your financial situation. Check out these 20 Things We Stopped Buying to Save Money!
5. Set Financial Goals
We come full circle to our thoughts about the new year, and the opportunity to refresh ourselves in the ways we’ve long wanted. Part of this review and resolution exercise is to allow us to reset our priorities and to restore motivation.
After the things mentioned above, you may begin to think about luxuries or amenities that you and your family have gone without. The reason behind building a stable foundation is to be able to enjoy LIVING life rather than merely being a participant.
With the right guidance and consistency, you can be working toward multiple goals at the same time, and this is a way to see both long- and short-term rewards for your efforts. But you want to be realistic in your expectations; that is why this tip is mentioned after the others because to succeed there is a prerequisite of enjoying the fruits of your labor otherwise.
Communicate your wants and needs with your family so that everyone is part of the experience, and can join in the adventure. It should not be a burden to improve yourselves. Watch as confidence grows with each step, and the dark cloud fades away into the sunshine. Cheesy, cliché? Yes. But that doesn’t make it any less so.
Think about the next month or two. Then, the next couple of seasons. Finally, decide where you want to be at the end of the year, what can realistically be achieved, and define the smaller steps it will take to get there. These goals will have sub-goals within them, and marking each one off the checklist will become fulfilling in its own.
If you make the decision, this can and will be your year. You are looking for ways to improve your financial situation, and the template above will give you the light at the end of the tunnel that you have been seeking. Armed with your own information and goals, you can present your intentions and desires to your financial advisor. Together, you can forge the path to the life you deserve.
The time is now. Make it so. Just do it. Get ‘er done.