The current economic climate is pretty bleak, no matter what spin you put on it. While some countries are doing better than others, living standards for regular Joes have remained static (or decreased) over the past year and a half. While global events may be out of our control, there are some things you do control that could improve your standard of living slightly now, but most assuredly down the line. This article will cover six tips you can use immediately to improve your finances and get into a position where your stomach won’t get tied up in knots every time you receive a letter from your bank.
Begin Saving Now For The Future
As the saying goes, there is no time like the present, and you should undoubtedly heed this advice if you want to get your budget on track. One of the best ways to ensure you won’t have to worry about money in the future is to start saving and investing today. As you can see over at sterlingsavvy.co.uk, you have plentiful options regarding where to put your money to work, ranging from the more stable government bonds to the more volatile cryptocurrency market. If you are a complete novice, most experts recommend putting a certain percentage of your money into bonds and the rest in stocks. Regarding stocks, the best option for bringers is a high-quality ETF like those that track the S&P 500 or FTSE indexes.
Develop A Budget To Help You Live Well But Frugally
A budget will be the bedrock on which you will build your wealth, but you need to start somewhere. When setting up a new budget, there are various things you need to consider:
- What is a necessary and unnecessary expense
- What items you can cut and keep (more on that later)
- How your income syncs with outgoings
- Any debts you might have
In order to make it work, you need to be fastidious and enter every cost, no matter how small. Luckily, you don’t need any sort of fancy app; the free Google Sheets application will do the trick. Moreover, because it’s cloud-based, you can update it anytime you transact.
Set Aside A Fund For Emergencies
Saving is great but won’t help when an emergency strikes. That is where cold hard cash will come into play. As a part of your monthly budget, you should aim to put aside a certain amount in cash. You can keep it in a liquid government bond to earn interest while it accrues, but it must be ready to withdraw as soon as needed.
Pay Off Or Consolidate Your Debts
Debt isn’t awful per se, but it’s how you acquire it that makes the difference. A mortgage to buy a home can be considered “good” debt while taking out credit card loans to buy a new iPad is probably considered a pretty terrible use of money. Nevertheless, if you have lots of high-interest debt (is there any other kind), you should aim to pay this down before you save. If you have many debts piled up around you, see if you can consolidate them into one manageable payment, making your life much easier.
Use A Credit Card For The Rewards
Yes, we just said earlier that credit card debt is bad, but this is not that. Instead, the idea is to sign up for credit cards that offer rewards when you use them. You will only use the card to pay your acceptable expenses (fuel, groceries, utilities, etc.), and make sure to pay everything back at the end of each month. Not only will you clean up on rewards such as cashback and air miles, but you will also improve your credit score dramatically.
Cut Unnecessary Expenses
Ask yourself if you really need that subscription to Netflix or Spotify when YouTube will do the trick most of the time. As soon as you are able to discern between needs and wants, you will discover your costs reducing and your happiness increasing.
Improving one’s finances should be on the minds of everyone regardless of their current situation. It will help you save for the future and remind you of what is important in life.
