We all encounter financial struggles from time to time, whether we’re trying to gather the funds to start our own business or repay student debt. This, coupled with the rising cost of living, means it’s hardly surprising that “70% of Americans feel financially stressed” right now.
With that in mind, here are some simple steps you can follow to improve your financial standing.
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Start by budgeting.
Budgeting is often the first step towards becoming financially stable. After all, budgeting ensures that you’re spending your money wisely and saving it when necessary. For example, drawing together a simple weekly or monthly budget can make you identify poor spending habits that would otherwise go unchecked – such as relying too heavily on take-out instead of cooking food at home. After all, while buying a snack here and there may not seem like a significant expense, you’d be surprised at how quickly it can add up.
If you aren’t sure where to start with budgeting, start with the 50:30:20 rule. When applied to your daily habits, this means that:
- 50% of your budget goes towards your needs. This will cover expenses such as rent/mortgage payments, insurance, grocery bills, and car payments.
- 30% of your budget goes towards your wants. This will cover the costs of non-essential expenses, such as dining out, subscription services, and vacations.
- 2% of your budget goes into your savings.
Find ways to cut back on your expenses.
Finding ways to cut back on your expenses means you can save more money, which means you can begin to pull yourself out of debt. Fortunately, there are many ways in which you can start saving – in every area of your life.
For example, one way in which you can begin to save more money each month is by using price comparison websites to ensure you aren’t overspending on expenses such as:
- Utility bills
- Health Insurance
- Car Insurance
- Home Insurance
If you find a better deal using these websites, reach out to your current provider with this information before making the switch. In some cases, they may be able to offer you an even better offer in order to retain your custom!
Seek legal advice if necessary.
If you find that your situation continues to get worse as opposed to improving, it’s important that you know when it’s time to ask for help. For example, you may want to work with a financial advisor to determine your next step or file bankruptcy. If the latter is necessary, you may want to contact Chapter 11 Attorneys DFW.
Filing for bankruptcy can seem daunting, but reaching out to the relevant attorneys now means that you can protect your best interests moving forward. Furthermore, they’ll be able to talk you through every step of the process so that you understand what is going to happen over the coming weeks.
Set up a savings account.
According to a recent report, more than one in ten Americans do not have any savings or a savings account. However, while you may feel as though you don’t have a lot of money to set aside, setting up a savings account can be instrumental in improving your financial situation.
Firstly, it means that you’re setting money into a separate account that you don’t have immediate access to. This means that you won’t spend this money accidentally. Furthermore, specialized savings accounts often offer interest, which means that they can provide you with a way to earn some passive income.
Find an additional income stream.
Finding alternative income streams can, for obvious reasons, improve your financial standing. As such, it’s important that you begin to explore the options that are available to you. For example, you could start up your own business or side hustle, which is built around your hobbies and interests. This way, the “extra work” you’re carrying out doesn’t feel like work at all. However, there are also plenty of passive income opportunities to consider, such as investing or selling stock photographs.
In short, there are many steps you can follow in order to improve your financial situation; you simply need to be realistic about what you need to do.
For example, you should not shy away from the fact that you are struggling or pretend that everything is fine when it really isn’t. After all, the sooner you work to resolve this issue, the easier it will be to tackle head-on.