This is still one of my favorite stories of 2022. The journey to financial freedom starts with learning the best practices and making sure you manage better to become successful. Let’s get started!
- Monitor your spending to improve your finances.
If you don’t know what and where you’re spending each month, there’s a good chance your personal spending habits have room for improvement.
- Create a monthly budget.
Use your monthly spending habits, as well as your monthly take-home pay, to set a budget you know you can keep.
There’s no use setting a strict budget based on drastic changes, such as never eating out when you’re currently ordering takeout four times a week. Create a budget that works with your lifestyle and spending habits.
You should see a budget as a way to encourage better habits, such as cooking at home more often, but give yourself a realistic shot at meeting this budget. That’s the only way this money management method will work.
- Make your savings grow.
Create an emergency fund that you can dip into when unforeseen circumstances strike. Even if your contributions are small, this fund can save you from risky situations in which you’re forced to borrow money at high-interest rates or possibly find yourself unable to pay your bills on time.
You should also make general savings contributions to strengthen your financial security in the event of a job loss. Use automatic contributions such as FSCB’s pocket change to grow this fund and reinforce the habit of putting away money.
- Reduce the recurring charges.
Do you subscribe to services you never use? It’s easy to forget about monthly subscriptions to streaming services and mobile apps that charge your bank account even when you don’t regularly use these services.
Review your spending for charges like these, and consider canceling unnecessary subscriptions to hold onto more money each month.
- Save to afford big purchases.
Certain kinds of loans and debt can be helpful when making major purchases, such as a house or even a car that you need right now. But for other big purchases, cash offers the safest and cheapest buying option.
When you buy in cash, you avoid generating interest and creating a debt that requires months—or, often, years—to pay back. In the meantime, that saved money can sit in a bank account and accumulate interest that can be put toward your purchase.
- Get an investment strategy.
Even if your ability to invest is limited, small contributions to investment accounts can help you use your earned money to generate more income.
The path to better finances starts with changing your own habits. Some of these changes will be easier than others, but if you stay committed to this transformation, you’ll end up with great money management skills that will serve you throughout your life—and in the meantime, you’ll have more money in your pocket.
Live The Joy Life!