Managing your money and staying on top of your finances can sometimes be too overwhelming – at least, that’s what it was for me.
I’ve made so many financial mistakes over the years that I’ve trapped myself into this financial rut.
It’s like every day I was gasping for air, wanting to break free from debt and all other financial stress yet no matter what I do, the hole I was in was just too deep – making it too impossible for me to get out.
And since you’re here, chances are you might be feeling this way too.
I know how stressful it is to live paycheck to paycheck, buried in debt, you just want so badly to get ahead and just fix everything yet you have no idea where to start.
You have no idea how to improve your finances or if there’s even still hope left to turn your financial situation around.
I’m here to tell you that there is. You can still learn how to change and improve your financial situation.
It may not be easy but it’s definitely far from impossible.
So, to help you get started, here are 5 Effective Ways to Improve Your Finances…
Create a long-term goal
Back when I was working a stressful 8-5 job, though I was earning good money, I still had zero savings and no emergency fund.
I was only too focused on the things that I can do with my money NOW — it was always instant gratification.
I never even bothered to think twice about how my actions might affect me, financially, in the future.
And you know why it was so easy for me to get caught up in that cycle? It was because I didn’t have any long-term goals.
Knowing and having a long-term goal is an important step in improving your finances.
Knowing where you want to be, where you want to end up instructs you on the things that you need to do now to get there.
Doing this will help you make better money decisions. It will also make it easier for you to be more mindful of how you choose to spend your money.
So, take the time to sit down and write very specific long-term goals — this will make a huge difference!
Its time to stop taking your finances for granted and start working your way towards achieving your financial goals with the help of this Ultimate Finance Planner
Prioritize your Debt
Now, this step can be messy, stressful and a bit overwhelming. (That’s what it was for me)
After being stuck in a financial rut due to me having to quit my job, I knew that I had to face the music and finally figure out the grand total of my debt.
I’m not going to lie, that step was not easy — it was scary. But I knew that if I wanted to change my current financial situation and get rid of my debt, this step was necessary.
So, sit down, have a glass of wine if you must and list all the debt that you have and their interest rates. After having all those figured out, it’s now time to start creating your debt repayment plan.
I personally go for the debt snowball method (Paying the smallest debts off first).
Others may prefer going for the debt avalanche method (Paying the highest interest rate debt first)
It’s important to choose what works for you and what motivates you more!
And I tell you, the sooner that you do this, the better it will make you feel.
Start Building your Emergency Fund
This was one of my biggest mistakes. I never saw emergency funds as a necessity. I know, silly right?
I didn’t prioritize it, I didn’t even have any intention of starting one.
But after having to face an emergency of my own (I had to quit my job due to mental health reasons) that’s when I knew I made a huge mistake in taking it for granted.
Though we are not hoping for an emergency, we’ll never know when it’s going to hit us.
Like, when your car breaks down or an unexpected bill comes up, or even job loss.
Trust me, you wouldn’t want to get caught up in the stress of worrying about how you’ll make the ends meet or how you’re going to pay for all those unexpected expenses.
Not only does building an emergency fund prevents all that from happening, but it also prevents you from burying yourself into debt once an emergency comes up.
So, start now. You don’t have to start big.
Aim low and start for your first $1000 and just keep increasing it as you go!
Create an Effective Budget (& STICK TO IT!)
I know for most people creating a budget sounds cliché and time-consuming.
But if you are not happy with where you are now financially and you want to change that, creating a budget can be very helpful.
Whether you want to save money or pay off debt — setting up an effective budget will help you get there.
You may feel like you don’t have enough money to even create a budget but regardless of how much money you’re making, creating a budget is possible and will benefit whatever your current financial situation is.
Doing this will also save you from overspending and from burying yourself into debt.
So, take the time to sit down and budget your money down to zero – this will make a huge difference to your finances!!
Beware of Expensive Habits
I’m not going to lie, I had a lot of these. I’ve made so many poor money choices that had buried me in a deep financial hole.
Often, these expensive bad money habits are already ingrained in us that we never even realize that we are already sabotaging our finances unconsciously.
So, check your spending habits and recognize what habits are keeping you from achieving your financial goals or habits that are keeping you broke and living paycheck to paycheck.
Once you have already identified those, do the best that you can every day to shift those bad habits into habits that can help change your financial situation for the better.
Though it may not be easy to change it but keep focusing on your goal and trust that all the sacrifices that you do now will reward you tenfold in the future.
I know sometimes we may feel that there’s no hope for us to turn our financial situation around and achieve financial freedom. Especially, when all you have in front of you are debt and bills.
But remember this: Though it may not be easy, it is still possible for you to change your situation. It’s possible for you to live financially free.
You just have to be willing to do everything to make it happen! So, take it day by day and don’t give up — remember consistency is crucial.
What did you do to improve your finances? Let me know in the comment section below or send me an email, I would love to hear from you.