Many people are finding it hard to make ends meet. Household incomes are down and it is easy to slump into debt. Here are five things you can do to help improve your personal finances and get your head above water.
1. Set a budget. Write down your monthly income and then list and subtract all the essential bills that you have to pay each month, such as rent, mortgage, utility bills, etc. What you are left with is your monthly disposable income. Set a budget for food, drink, entertainment, travel, etc. and plan it so that you have some money left over for unexpected expenditures, savings or debt reduction. The very act of writing down this list will help you to manage your money better.
2. Reduce your debts. Start with credit card debts as they carry very high rates of interest. Try to keep your credit card spending down. Pay off the full amount each month and pay down any debt on the card as soon as you possibly can. Then look at any other loans you have outstanding. Plan to pay them down as soon as you can. Finally look at your mortgage. If you are paying say 5 percent interest on your mortgage but getting only 1 percent interest on your savings then it might be worth using some of your savings to pay down your mortgage. That would save interest. But it is always wise to keep some cash savings just for the flexibility it gives you.
3. Reduce spending on luxuries. How many times do you eat out in a month? How much are you spending on items that are nice to haves rather than must haves? You have to get spending under control so look very hard at these items and reduce them. Eat out less often, drink less alcohol, don’t buy those shoes that look nice but you will rarely wear.
4. Get paid more. Ask your boss for a raise. Choose your moment and do it politely. The worst that can happen is he or she will say no. Even then it signals your ambition. Take on more responsibilities at work, do more overtime, show that you want to do better. Consider applying for a better paid job.
5. Boost your income. Look around your place and identify items that you no longer use. Sell them on ebay or at a garage sale. Turn your clutter into cash. Think about part-time or freelance work. Is there a skill you have that could make you some money?
These five steps will help you get your income above your expenditure. This means you can build up your savings and remove the worry of debt.
These are all very sound tips and i fully endorse them. You can find out how you actually do all of these steps in my new book “How to Control your money” by Colin Timpson MCMI, available on Amazon & kindle. In the book i share with you my “cash flow” method which aids you in your plan / budget and decision making. By using my method you will see on a week by week basis how you are doing against your plan and what cash you will have to put towards your goals at the end of the month. It totally removes the “guess-work” from your personal finances.