Many people crave for financial freedom, however, only a limited few are able to achieve it. A quick glance at some statistics reveals some shocking information about personal finance in the US. Some of the prominent stats include”
- 30% have less than $1,000 in all bank accounts at any given time
- 65% of Americans literally live paycheck to paycheck and have NO household budget
- Fully one-third of Americans admit to having not saved anything at all for retirement
Other Shocking Stats include:
- Fifty percent of Americans have less than one month’s income saved for a rainy day
- You spend 12-18 percent more when you swipe your card than when you use cash.
- You can save $112,000 over a lifetime by bringing your lunch to work.
- In 2008, US credit card debt reached $972.73 billion. The average credit debt per household was $8,329.
Learning effective ways to manage finances isn’t an attracting subject for many people; nevertheless, you can ignore your budget and personal finance at your own peril. Efficient financial management is the first step to financial success and ultimately to financial independence.
Understanding savings, interest rates, the stock markets and building credits are some of the basic requirements for long-term financial success. According to a Global Financial Literacy Survey, only about 57% of US adults are financially literate.
Finance is an essential topic for life and the earlier you study and master it, the better. Below are 23 ways you can drastically improve your finances in the next 30 days.
#1. Compile All Your Income & Expenses: Arrange them by categories such as Savings (emergency fund, retirement accounts, etc.), Household Expenses (utilities, food, heating, etc.), Rent /Mortgage, Commuting, Entertainment, Debt settlement (student loans, etc).
The process doesn’t have to be perfect, just ensure you complete it. You can use a software like Excel, a service like Mint, or even just a simple pen and paper — whichever you are comfortable with. After compiling everything, review everything to make certain it is all correct. This process may take you more than a day to complete. Take your time and ensure all necessary information is entered.
#2. Draw up a Spending Plan: Using the data compiled, come up with a spending plan and ask yourself some basic questions such as:
- Are you okay with your expense level?
- Are you pleased with the way things are going or do you desire to save more?
Pick out one area in your expenses (just one area) where you would like to cut down on spending. Less than 1 in 3 Americans keep a personal and household budget, according to Gallup report.
#3. Make a Deliberate Plan to Save Money: Determine to save money in some areas of your budgets and look for ways to make it achievable. For instance, you can decide to cut back on eating out and make a meal plan for the month.
#4. Reduce Your Fixed Expenses: From experience, rather than trying to penny pinch, take a serious look at your fixed and recurring expenses and find out where you can save money without actually sacrificing your quality of life. For instance, if you can reduce your phone calls by 10 minutes and cut your cell phone bill by $10 or more a month, that is an effortless $120 or more a year. Here are more areas where you can quickly and easily reduce fixed expenses:
#5. Demystify Your Paycheck: The moment has come for you to check in on the most important financial document you are most likely ignoring.
#6. Make Use of a Spending Tracker: Tracking your cash outflows can go a long way in helping you to assess how you spend your money and ultimately, how you can cut it down and save more. There are several free apps that can Keep track of your spending by type, month or location.
#7. Have a Financial Conversation: It’s necessary to sit down and talk about your finances with your partner; children or whosoever has influence over your wallet the most to ensure that you’re all on the same page. It is necessary to talk about effective financial management, your goals, your budget, and spending plans with your partner/children/friends and bring him/her into the game plan.
#8. Automate Your Finances: Set up a saving account where you can transfer a percentage of your income, either weekly or monthly depending on when you get paid. Even if you are a business owner, you can transfer a percentage of your income at specific periods.
This necessitates you put money away before you pay your bills. Terrifying, yes! Nevertheless, this one practice can drastically change your financial life for you. Automated deposits are easy and efficient for the reason that they take money straight from your paycheck and keep it where you need it – into a savings account. If you get a raise or get some unexpected income, you can also transfer them into your savings account.
#9. Declutter & Sell: Being organized can make you very efficient and productive. Take out the time to declutter your house, seek out stuff you really don’t need or no longer useful to you and put them up for sale on eBay or any other auctioning site. Immediately you sell them, take at most 25% of the proceeds for fun and transfer the rest of the cash to your savings account.
#10. Declutter Your Finance: Still in the mood to declutter? Create a number of folders (virtual or physical) to save your tax-related receipts. Use another folder to keep documents and receipts you may need for future references and another folder for monthly rotating documents (financial documents you can discard after reconciling with the bills. Credit card statements, etc.)
To make your life simpler, can you sign up for e-bills instead of paper bills? You can schedule a time every month to receive the pdf files and save them if you desire to keep the bills. Also, shred documents that you no longer need.
#11. Negotiate Your Bills: according to a survey data from CreditCards.com, Almost 90% of credit card holders who requested their issuer to remove a late fee were successful, and almost 80% were able to reduce their APR via a simple request, per CreditCards.com. Nonetheless, only about one in every five card holders actually asked for either.
If you fidget at the thought of negotiating to pay less than the listed price, begin with your credit card features. You’ll probably be less weak talking about prices if it’s your not-too-favorite credit card issuer on the other end of the call. Everything is negotiable.
Be courteous when you engage in negotiation. Never be rude and never take advantage of the other person on any account. Negotiation involves a back-and-forth dance until you find a solution satisfying to both parties.
#12. Sign Up for a Personal Finance Newsletter: 57% of workers in Americans have saved less than $25,000 for retirement, and 28% have saved lower than $1,000. Personal finance is one of the most vital aspects of living in the contemporary world. Ordinary people, too often, fail to gain knowledge about the opportunities that can mainly help them or pursue the actions that directly have an effect on their personal finances. Discover new tactics to control your personal finances and protect your financial future by signing up for a personal finance newsletter.
#13. Do A Bank Audit: Are you paying for your credit card or checking account? If you are, it is high time you change your bank. Search for a free checking account. Also, ask your bank for ways you can avoid paying a fee. You may just be surprised at the options that will be available to you.
#14. Cut out Ridiculous Fees: Fees, according to time.com are the mosquitoes of your financial life, cut off these ridiculous fees.
#15. Undertake a Subscription Audit: Do you have any paid subscriptions — online or magazine subscriptions? Do a research to see how you can replace them with free subscriptions. You will be surprised at what a simple Google search can reveal. While you are at it, find out all the services provided by your library. You may be able to save lots of money by using your library more (low-priced tickets to magazine subscriptions, local attractions, notary public services, state park passes, museum passes, to name a few).
#16. Take Advantage of Promo Codes and Deals: There are various daily promos and deals you can benefit from if only you know about them and how to utilize them. Discover ways of cutting through online waste and discovering the best bargains of your life.
#17. Spend Nothing In 24 Hours: Get ready to have a $0 day. That means spending nothing at all, all day!
#18. Focus On Short-Term Savings: Aspire for short-term savings goals, for instance, setting aside $10 a week or $50 in a month instead of a long term savings goal of $500 in a year. It is much easier to save successfully when you aim for a short-term goal.
#19. Make a Savings Plan for the Rest of the Year: Our financial focus changes over the course of our life. As a teenager, you may save for a car, while saving for your kids’ education might be your priority in your 30s, and in your 40s and 50s, you might be more concerned about your retirement. However, to accomplish any of these goals, you need a concrete savings plan. A savings plan that helps you to stay on track for your long-term financial goals, and one that will keep you through any financial downturns that may occur along the way.
#20. Shop with a List and Stick to It: It’s easier to resist the temptation of buying on impulse when you have made a list of stuff to buy before leaving home. People who shop with a list, and make the effort to stick to it, spend much less than those who make up their mind on what to purchase when they get to the shop or market. The cash you can save from this habit alone annually can easily be in hundreds of dollars.
#21. Only Make Use of the ATMs Of Your Bank: Making use of another financial institution ATM could well cost you about $4.00 per transaction or more than $150 in a year. Avoid these charges by using only the ATM machines of your financial institution.
#22. Never Purchase Expensive Items on Impulse: Reflect over every expensive item for at least 24 hours before bringing out your card or cash. Resisting the temptation of buying on impulse and giving yourself time to contemplate whether you actually need that item will ensure that you have much fewer regrets about buying on impulse, and far more money saved for emergency and other necessities.
#23. Watch Your Savings Grow: Ensure that you monitor your progress periodically, preferably every month. Not only will this habit help you stick to your personal savings plan and goals, but, it, in addition, helps you recognize and fix problems promptly.
With these easy ways to save money, you are sure to be able to save more in the next 30 days and begin the journey to financial freedom that comes with careful and deliberate determination to save.
Have you taken any concrete steps recently to better manage your finances? Please share your experience below.