Everyone can improve their finances if they take it seriously and do the right things. One thing that helps you to stay on track is to sit down and give yourself a financial check-up every six months.
Regular check-ups with your doctor are a good idea, so doing the same for your finances is a great way to prevent problems before they get out of control. After conducting your semi-annual review, here are five common things you can do to begin putting your finances back on the right track.
1. Use Credit Cards With Caution
Many people pay for things with credit cards that they could pay for with cash or debit. Sure, there are great rewards and cash back credit cards out there that can make using those cards worthwhile, but the reality is not everyone has the discipline needed to use credit cards without risking costly mistakes.
Even with good intentions of paying the balance off every month, it just takes one month where you let the balance carry over because money is tight at the moment. Then from there it can quickly snowball out of control.
Most people carry an outstanding balance on their credit cards each month, so simply paying cash or debit cards could potentially save you between 10 and 50 dollars a month that would otherwise go toward interest on the balance. It might not seem like much, but it adds up over time.
2. Use Coupons
There’s often a bit of a stigma about clipping coupons. Here’s the thing. You don’t need to spend hours every week clipping out every last coupon you can find.
These days, even the internet can be a great resource for finding coupons, which makes it quicker and easier.
Don’t think it’s worth it? Think again. Just using a handful of coupons on items you regularly buy anyway could save you ten bucks a week at the store.
That might not sound like much, but that’s close to $500 a year in savings on the things you buy anyway. That would make a nice IRA contribution.
3. Set Realistic Financial Goals
We all have goals, but there’s a difference between dreams and goals. Many people dream of owning a home or having their own business but they never do their research and find out how much these things actually cost so that realistic goals can be set.
For example, if you need a $50,000 downpayment for a house then you should set a target goal such as having a home in five years. This requires that $10,000 each year is saved.
This allows for planning to be done so that the goal can be achieved. Now you have a specific action plan and can do what’s necessary to reach that goal. Otherwise, having a lofty goal without a plan on how to get there ends up just being an unfulfilled dream.
4. Consider Paying Down Bills instead of Vacationing
We all deserve a good vacation, but sometimes you need to make sacrifices if you have more serious issues looming.
Some people spend thousands of dollars each year on vacations while still drowning in debt or having nothing set aside for retirement. One great way to get a vacation and pay down debt is to travel locally.
Sure, it would be nice to take a two week Alaskan cruise, but if you have to put the entire trip on a credit card, it might be better to stay closer to home.
You can still have a relaxing and enjoyable vacation without spending thousands of dollars. Check out local attractions and explore what’s within a day’s drive from your home. You might be surprised at what you’ll find. And at a fraction of the cost of a big vacation, you can keep from going even deeper in debt.
5. Make Weekly Deposits to a Savings Account
Most people have very little money set aside in savings. It is important for the finances that there are liquid assets in case of emergency expenses or the loss of income.
Every week, you can set up weekly withdrawals from your checking account and put them into a savings account.
Without having an automated system in place, it’s inevitable that come the end of the week or month, you’ve paid all your bills and feel there’s nothing left to put into savings.
By making your savings contributions automatic, you don’t even have to think about it and the money gets put away safely. Again, it doesn’t take much. Just 20 dollars a week will put about $1,000 into your savings account a year.