Financial freedom is one privilege everyone wishes to have, but only a few individuals are able to achieve. While all of us dreams of being able to live comfortably without having to worry much about the price tag, many of us still live paycheck to paycheck.
However, it doesn’t have to always be like this.
There’s still hope in trimming your debts, saving money in your bank account and avoid having to struggle just to make ends meets. With careful planning, budgeting and putting yo`ur plans into action, you can achieve your financial goals.
For starters, here are seven simple tips that can help you shape up your finances this year.
Determine your current financial health.
Know where you stand financially to start cleaning up your finances. Find out how much your total monthly income and debts are and calculate your Debt-To-Income Ratio. Becoming intimately aware of where your money goes will give you an idea on how to create a better budget plan.
Budget, budget, and budget some more.
Budgeting is the best way to make sure you don’t overspend money on things you don’t need. Create a workable budget wherein you’re able to pay your monthly debts, save enough percentage of your income and prioritize your needs over wants.
Start saving as early as you can.
This is one of the saving tips you always hear from financial experts. Start saving early to reap bigger rewards. This is one of the reasons why piggy banks and savings accounts for kids exists. Teaching the younger generation to save as soon as they can give to give them a good start on building their wealth.
Automate your savings.
Automatically deducting savings from your income and depositing it straight to a bank account that’s meant for savings alone is the easiest way to save. This way, you’ll have no excuse not to save each time you receive your income.
Start paying off your debts.
Many of us resort to debts to pay for our needs and unfortunately, things we only like but are not necessary. No matter what your debts may be, aim to repay them off or reduce them drastically. Pay more than the required minimum payment – or better yet, in full when you can.
Avoid opening up new credit accounts.
New debts are another financial burden, to refrain from opening new credit accounts – especially if there is no immediate need. You may be tempted to take a new loan or credit card thanks to its low-interest rates offer – but you won’t want giving in to the temptation only to end up with a bigger debt than you started with.
Control yourself to avoid impulse spending.
So many temptations surround us daily, and it’s so easy to give in even if we know we can’t afford them. Make sure to live within your means and to delay instant gratification. This will give you a chance to evaluate your expenses and see if what you wish to buy is a real need and if it’s worth it.
Good Read: Five Reasons We Impulse Buy
Shaping up your finances can be hard, but it’s never impossible. Thankfully, there are lots of saving tips to help you give your financial health a boost. Start saving as early as you can, put your financial goals in mind and put them into action.