Most people struggle with their finances. And most of the time, it’s due to bad financial decisions and choices. Sometimes these choices seem small and insignificant. But when you calculate the long-term impact of these choices, they can be ruinous.
If you feel like you’ve been struggling with your finances, chances are you can actually do something about that. If you want to manage your money better this year or learn what you can do to put yourself in a better financial position, the tips in this post will help you do get started. This way, you’ll be in a better place financially at the end of this year.
Study Personal Finance
When was the last time you read a good book on money management or finance? Chances are you probably haven’t done that. Because if you had, you’ll be in better control of your finances. So, buy some good books on personal finance.
If you can’t afford it, start reading personal finance blogs and websites like ours. There’s also Youtube which has a ton of videos on personal finance. You can also visit the personal finance section of your local library.
You’ll be amazed at the resources that are available to you in these libraries. The good thing is you can always just borrow the books, read them and return them.
Cut Your Monthly Expenses
The easiest way to do this is by budgeting. You need to start keeping track of the things that you spend your money on every month. These habits are important for your financial well-being.
Determine the most important and necessary expenses, and get rid of the rest. If you want, try doing a no spending challenge. Most people don’t know this, but they spend way too much money on things like coffee monthly.
For instance, the average cost of a Starbucks coffee is $2.75. If you drink two cups a day, that’s $5.50. Multiply that by 30 days and that’s $165. But if you made your coffee at home, you’ll spend less than $35 monthly and save an extra $130. Apply this same scrutiny to other purchases and you’ll soon start seeing where you’re “leaking” money.
Avoid Lifestyle Creep
When you get that new promotion with the new bump in pay, avoid “upgrading” your lifestyle. Most people make the mistake of suddenly buying luxury items as their income grows, yet they wonder they can’t seem to have enough money.
Instead of eating out at a high-end restaurant, cook your meals at home, or eat a decent affordable place. Buy decent clothes instead of splurging on designer wear. Then, save as much money as you possibly can. You’ll need it for the next tip.
Put Your Money to Work
Instead of splurging, let your money start working for you. Start investing in things like real estate and the stock market. While there are many investment vehicles out there, we strongly recommend just focusing on these two for now.
Remember the monies you saved earlier? Start using them to trade the stock market or buy and flip properties. Investing will help you add extra income streams, leading to even more financial power.