It’s not just your spending habits that change when you decide to improve your personal finances, it’s the way that you think too. Just like any behavior that you’ve built over time, spending is a habit that can be very difficult to change at first. Often, the best way to achieve results, is to adjust the relationship that you have with money one step at a time. Today, we’re going to take a look at some of the things that you can do to make improving your financial situation more than just a trend for the new year. Here’s how to update your way of live once and for all and strive for success going forward.
Check Your Interest Rates
One of the main reasons that people struggle with their money, is that they get used to spending cash passively. How often do you check that you’re still paying the best rates on your insurance, your utilities and even your interest rates? Checking your interest rates and options for repayment with old costly student loans could help you to discover quick and convenient ways of saving money instantly.
Pay Your Savings First
It’s easy to tell yourself that you can ignore your savings account one month when you want to spend extra on a night out with friends – particularly if you see your savings as an optional expense. However, if you automatically set up a direct payment from your current account to your savings account, you won’t be able to make this mistake. Make paying your savings as automated as paying your bills, and you can rest assured that you’ll end each month with more in your piggy bank.
Set and Maintain a Budget
It will always be easier to reach your financial goals when you have a set budget in mind to guide how you spend, and how much you save. Take the time to sit down with your monthly expenses and figure out how much cash you need to dedicate to your bills, your savings, and your discretionary costs, or even saving for your next vacation. Don’t forget that you’ll need to come back and update that budget regularly as your life continues to change.
Try Dealing Only in Cash
When we spend money using credit cards and plastic, it’s easy to forget about the value of what we’re spending. You’re not actually handing over anything physical, so it feels as though you’re not spending anything at all. However, if you switch to using cash only, then you’ll be able to see what you’re using in a very real way. Additionally, you can start giving yourself specific amounts of cash to take with you when you go out, so you can only spend what you think is reasonable, and nothing more.
Become an Active Saver
When it comes to improving your financial standing, you need to start by changing the way that you think about money. Becoming a more active spender who thinks carefully about every purchase that you make will lead to fewer impulse buys, and less debt in the long-term.