When it comes to maintaining good personal finance habits, you probably are facing at least one of several obstacles. You lack the discipline to make and follow a budget, you are struggling with debt or you just don’t make enough money. These may seem like separate problems, but they are all related, and the tips below can help you get a better handle on all of these areas.
Make a Budget
Creating a budget that you can stick to might never be easy for some people but even for those to whom it does not come naturally, it is not as hard as it seems. If you’re struggling with this first step, you should get an app that will track your spending and do most of this work for you. Be sure to use it for a few months so that you have a more realistic picture that includes irregular spending, and do not forget to factor in things like gifts for people and vacations.
An app can then help you create the budget and can provide useful budgeting tips periodically, as well as notifications when you are approaching your limit in any given category. While you should not be frivolous with your budget, you need to build in enough flexibility to allow yourself indulgences or you will not stick to it. Honesty is the first consideration when it comes to creating the categories of your personal budget. If you are someone who enjoys dining out regularly, build that in so that you are not robbing Peter to pay Paul each month.
A Debt Payoff Plan
There is more to a smart plan to pay off debt than just dutifully sending in the required payment each month. Are there ways you could pay it off faster, whether by reducing the interest that you owe or in some other way? For example, you might be able to pay student loans with a credit card. While this might not sound like a great idea since many credit cards have high interest rates, you may be able to put it on a card that offers cashback rewards and get money back. Some cards even offer introductory low-interest rates as well, which could save you additional money.
Incoming and Outgoing Money
The brutal bottom line of financial management is that if you are struggling financially, you need to figure out how to bring in more money or spend less. You addressed the latter issue when you put a budget together although it is always worthwhile to review your budget periodically and see if there are places you can tighten it. Bringing in more money may feel like it’s easier said than done. After all, if it was just a matter of deciding to make more money, wouldn’t everybody do it?
In fact, you may be surprised at how much extra money you can generate when you put your mind to it. You could ask for a raise at work or get a better-paying job. You could also look into what you own that you could sell for cash. If you have skills, such as programming or tutoring, you can probably pick up some freelance work. If you don’t have any particular skills but you love animals or being outside, people will pay you to walk their dogs or mow their lawns. Be creative, use the cash to pay down your debts, and start investing, which can bring in more money than any job.