This is a financial post by Tiffany.
Things to do to improve your finances
At some point in your life, you’ll need to figure out ways t0 improve your finances. Finance is important and everyone needs money to accomplish many things in life.
Whether your goal is to build a thriving business, comfortably take care of your family, buy yourself a nice home, or afford to travel at any time, you’ll need money.
This is why it’s vital to take a cursory look at your finances. You have to think of effective ways to improve finances to avoid a helpless situation when you need extra funds.
The challenge is that many people get flustered at the thought of improving their finances. To them, doing this means that they’d have to get another frustrating or boring job, put up with exceeding long hours of work as entrepreneurs, or even try accessing personal credit loans. While some of these may be necessary to help you get started on the right track, you’ll need more to improve your finances.
Improving your finance involves the following elements:
- Increasing your earning power.
- Working on cutting down unnecessary expenses in your everyday life.
- Setting short and long-term financial goals and committing to executing them.
Bear these points in mind as we outline some steps to improving your finances – if you so desperately need to do so.
Why you should commit to improving your finances
This is a no-brainer. Your life would be infinitely better if you’re able to make more money and better manage the money you make. Improving your finances will help you in the following ways:
1. Financial freedom
Many thought leaders and industry experts champion the idea of financial freedom. Wikipedia defines Financial Independence/Freedom as the state of having enough income to pay one’s living expenses for the rest of one’s life without having to be employed or dependent on others.
If financial freedom is important to you, please pay attention to the points in the next section of this post.
2. Happiness and satisfaction
Think of this as part of the results of financial freedom. When you can afford all that you need, you wouldn’t spend time angry and frustrated over trivialities. You won’t be stuck in a job you hate, work for a boss who detests you, or put up with co-workers you’d rather not see. You can’t enjoy such freedom if you’re living from paycheck to paycheck.
When you’re able to manage your money properly, you’re at liberty to make choices. You’ll be able to do the things that matter to you, like spending time with friends and family, and making good memories.
3. You are better equipped to handle emergencies
Another reason you must pay attention to your finances is to solve emergencies. Except you have psychic powers, you can’t predict future events.
What if you get a massive opportunity and have to relocate? What if you fall sick and need urgent medical attention that would cost you hundreds of thousands of dollars?
Improving your finances would help you better prepare for and respond to emergencies when they come.
So what steps must you take to improve your finances?
Steps to take to improve your finances
1. Find a way to earn more money
This is the major reason many people take up jobs they don’t love or do things they’d rather not be doing. They need more money to meet their daily needs. If you plan to improve your finances, you’ll have to determine whether you need to start earning more money.
The best and easiest way to do this is by evaluating your current income alongside your monthly expenses. If your expenses outweigh your income, you’re likely in for a financial turmoil. So consider increasing your earnings, especially if these expenses are essential needs.
The easiest way to earn more money is to get better at what you do. Acquire new skills and improve on the ones you already have. This way, you can offer better value and improve your pay.
Many people don’t keep track of their finances. When asked, they can’t exactly tell where all their income goes. Most people know how to spend, but aren’t too keen on budgeting.
According to CNN Money, a U.S Bank survey revealed that only 41% of Americans use a budget, even though budgeting is one of the most effective ways to keep track of one’s finances and control impulsive spending.
If you want to improve your finances, you have to know where your money is going. This will give your finances direction and purpose. That’s what budgeting does for you.
3. Set up a savings account
Setting up a savings account and funding it consistently will help skyrocket your finances. Many financial institutions have impressive interest rates for savings account holders. Open a savings account with any of these financial institutions and have your employer transfer a percentage of your salary to this account every payday.
Also, you can set up an automatic transfer that takes money out of your checking account and transfers it to your savings account at intervals. This arrangement ensures the money doesn’t even get to you, eliminating the temptation to spend it. The best part about savings is that they grow without much effort on your part. You only need to be consistent with the practice of putting money away regularly.
4. Work on improving your personal credit score
Your personal credit score is the result of many interdependent factors, which you can figure out with little research. A terrible credit score and credit history will only lead you down a rabbit hole and get you neck-deep in debt. This is because you’ll have to pay higher interest rates on new personal loans.
The practical step you can take here is to hold off on getting any new personal loans or credit cards. Take some time to offset the bills you already owe.
5. Explore credit options that will give you a better interest rate
As much as possible, don’t settle for the first lender you find. Take some time to explore your options and go for the lender with the best terms: lower interest rates and longer repayment period.
This way, there’s a reduction in the money you spend on interest, with more time to pay back what you owe. As you perform this search, you may even find 0% interest cards as a welcome bonus. You can also find other mouthwatering deals that could get you out of debt and help better manage your finances.
6. Cut off unnecessary expenses
Spend some time sorting through your bills, both physical and online. Look for the bills that aren’t necessary and think of ways to get them out of the stash. You may want to cut down on things like premium channel subscriptions, exorbitant insurance packages (one way to do this is by shopping for better and more affordable options), and unlimited data subscriptions.
When these are out of the way, you’d discover that you may have shaved off a significant part of your monthly expenses. Less unnecessary expenses means more money to save and invest in profitable ventures.
7. Learn to invest
While this is a tricky one, the returns are massive – if done well. One of the secrets to improving your finances is by investing in highly profitable ventures. These could be small businesses, money markets, or assets like real estate.
If you invest the right way, your finances will skyrocket.
8. Local loan agencies
These agencies award credits to eligible individuals. Some of them would even give business credits under the right conditions. For example, you can get a Mississippi loan to help you out of your financial challenges. You then work out a convenient repayment plan, if you reside in this area.
For more information on how you can access these Mississippi loans, visit CreditNinja.com.
There are several things you must do to improve your personal finances. Follow the steps discussed in this article seriously and watch your money grow wings.