15 Small Changes That Lead To A Fat Bank Account
We’d all like to improve our financial situation, no matter what how old we are. Whether we’re planning for retirement, buying our first home, or getting out of debt, there are ways to transform our circumstances.
Some of these tips require minor changes, while others involve a financial overhaul, but each has the potential to offer profound benefits for our finances.
1. Set Your Goals
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Goal setting is essential for everyone. Managing finances has to have an end target, and if there’s no aim in sight, it’s easy to lose track of our spending. Establish whether you’re saving for a holiday, paying off debt, or simply meeting your monthly bills.
Having a goal also helps provide a sense of achievement, which will continue to build momentum as we work towards the targets.
2. Create a Budget
With a goal in sight, it’s time to work out your monthly budget. Include all outgoings and income, and check your bank statements to make sure you haven’t left anything out.
Some charges, such as rent and utilities, are fixed, while shopping and car fuel are flexible, so set an upper limit for those costs that are subject to change.
3. Track Your Spending
Once your budget is in place, you should check it monthly to ensure you stay within its limits. If you’re spending above the allocations in specific categories, consider how you can reduce that spending.
Budgeting apps can help with this, but it’s ultimately up to the individual to create that baseline before monitoring and adjusting it monthly.
4. Set Up an Emergency Fund
Part of your budget should include emergency savings. Credit cards and loans for unexpected household bills should always be considered as a last resort, and it’s far better to cover these ourselves.
It doesn’t matter if you can only spare a tiny amount because avoiding credit at any level is good.
5. Adopting the Savings Habit
If you need help saving money, you may have lost the habit. Try adopting the one-cent savings challenge to see if you can restore it.
On day one, put one cent into a jar. Put away two cents the next day and add one more cent moving forward. At the end of 12 months, you’ll have over $600 and may have rediscovered that savings mindset.
6. Identify Any Problems
There are times in our lives when we have to consider credit. Debt isn’t always bad if you can borrow for significant purchases such as a house or car.
Debt becomes problematic when you have too many credit cards or interest charges exceed your minimum payment. Establish if you have bad debt, and work to address it.
7. Get Out of Debt
Identifying those issues can lead to positive changes quickly. You can now include your debt payments in your budget and allocate money to deal with them.
If you need more room in that budget to address credit cards and loans, speak to an independent advisor. In extreme circumstances, working out a repayment plan is possible, and lenders may even freeze interest rates.
8. Look for Switching Deals
If paying debt forms part of your budget, look for offers and promotions from banks and credit card providers. Some lenders offer a 0% balance transfer deal on credit card balances, and while there may be a transaction fee, this will still save you money over the promotional period.
Similarly, some banks will offer bonus cash for switching your account, and all these deals are worth considering.
9. Avoid New Products
For larger purchases, consider used products. Cars are a good example. New vehicles depreciate quickly, while a reliable, used car will hold its value for longer.
For furniture, thrift stores and recycling outlets are good options. In many cases, the products are of better quality, and you’re helping the environment by keeping preloved products in circulation.
10. Carry Out a Ruthless Declutter
Statistics show that the average U.S. household has a staggering 300,000 items. Much of that exceeds what people need, and selling it could kickstart a change in your financial journey.
Whether you hold a yard sale or want to sell your unwanted items online, a thorough decluttering could be the fastest way to turn your finances around.
11. Adopt a Frugal Lifestyle
Frugal doesn’t mean “cheap.” It’s simply a way of living that reduces waste and unnecessary spending. Examples include growing your own fruit and vegetables and only buying clothes when your old items need replacing.
There are many more frugal tips, and adopting this lifestyle can quickly reduce shopping bills and other regular household expenses.
12. Look for a Side Hustle
If you have time to fit in extra work around your primary employment, this can quickly change your financial situation. Many work-from-home opportunities exist, including selling on eBay, renting out driveway space, and completing online surveys.
Research the options available and determine which is most suitable for your situation.
13. Reduce Expenses
Reducing your monthly outgoings is another method that can transform your finances relatively quickly. Many of us have subscription packages that we no longer use, so look through your statements and cancel those immediately.
When your insurance policies are due for renewal, you should review them carefully and always shop around for a cheaper quote.
14. Leave Cards at Home
Debit and credit cards offer convenience, but they make it harder for consumers to keep track of their everyday spending. Next time you head to the store, make a list and take enough cash to cover your purchases.
Paying in cash can quickly change your financial path. You may also be able to negotiate better deals on larger purchases, while your leftover dimes and cents can be put in the change jar for special occasions.
15. Create a Positive Mindset
Whether or not you believe in visualization and positivity, there are facts related to money and mental health. Your state of mind can affect how you deal with money daily.
Naturally, if you struggle with your mental health, you should seek professional help. By staying positive, you can quickly reframe your relationship with money.
