Now this isn’t meant to get your hopes up that you will wake up in 2019 and automatically be rich, as it takes years upon years to get to that point, but the longer you put it off, the longer you will be stuck in your current financial situation. By making the right financial moves you can be on your way to not only getting by paycheck to paycheck, but staying out of debt and finally, dare I say, getting ahead. I’ll warn you that the journey will not be easy though, as there will be plenty of sacrifices that will need to be made along the way.
Create a Budget :
If I asked you how much do you currently spend on food, gas, spending money, would you know the answer? Do you know how much your monthly bills are? You probably know how much money comes in though, but it’s the money that is going out that is the problem. If you can allocate a certain amount of money for each area, and stick to it, you can free up extra money in no time. It may take some adjusting to ensure that you are allocating enough funds, but stick with it, as it will be worth it.
Treat Household Finances like a Business:
Whether you are self-employed, know someone that is, or really care about the company that you work for, you would not want to run the business into the ground, so it should be the same with your household finances. You want to be as profitable as you can, having more money coming in then going out, so if you think about it as your business, you may be a little stricter. After all, your family depends on you, and you don’t want to leave them with a mountain of debt and nothing saved up at all.
Get Out of Debt:
Speaking of debt, whether you have a mortgage, personal or student loan, or credit card debt, you are probably spending hundreds of dollars a month just on interest alone, let alone the principal balance, so just imagine what you could do with an extra $500 month in just interest, let alone how much you are paying each month to bring the balance down. If you can free up all debt that you have, you will really make strides on getting ahead and staying ahead, with probably a lot more to show as far as savings and watching your income add up each month.
Be a Little More Economical :
As you tighten up spending a little more, you really start to think about what is important and what probably could be avoided. Taking going out to eat for instance. If you take a look at your debit or credit card statement from last month, check out how many times you grabbed coffee on the way to work, picked up lunch, or had carryout or ate at a restaurant for dinner. Probably hundreds a month were spent on eating out, when if you just would have gone grocery shopping and prepared meals at home, that would have been a fraction of the cost.
Reduce Expenses:
Now that spending money is getting looked at a little closer and we make decisions on what is important and what probably could be avoided, the same can be done with your monthly bills as well. You can start with your cable bill. With the amount of quality shows on HBO and Netflix these days, and since we DVR most live shows anyways, do you really need cable anymore to flip around hundreds of channels with nothing on? If you keep your internet and get a couple streaming channels for $10 or so each month, you can still stay current on all the best shows, and probably accomplish a lot more without TV being a crutch to lay on the couch and relax.
Increase Retirement Contributions:
You may need to contact a tax professional to see what is best for you . but now would be the time to really focus on retirement, even if walking away from work is not for the next few decades or so. If your work offers matching 401k contributions, that would be a good place to start, as otherwise that would be leaving free money on the table, and not be able to grow over the next thirty years, possibly missing out on tens of thousands of dollars that you would have had otherwise.
