I don’t have to be the one to tell you that there are two types of people. The penny pinchers who get a high off tracking every penny they can save. These people always seem to have a budget that works for them, and they tend to always come in under budget each month. And then there are the people who sit and wonder how that is even possible.
Some people are just gifted with money management skills that shine. It like a natural born talent for some. However, not all people who fall into group one were always great with money. Some people have to start out and learn the hard way by being a part of group 2 before they can adequately manage their money.
This second group of people will pretty well do anything they can to avoid managing their money properly. Often times they even will cringe at the idea of having to manage their money responsibly. This often comes out because of the lack of knowledge they have on the subject of money management. I know for myself I used to fall into this category. Every time I would look at my budget or check my bank accounts I didn’t know what to expect I wanted to be oblivious just like so many others.
Chances are if you are reading this post on personal finance tips my guess is you are a part of the vast majority of people who fall into group #2. And you are here because you want to change and you want to learn so you can solve your problem of money management.
You know I was in the second group at one time, probably in a similar situation to you. To sum it up I was scared to know the reality of my personal finances. I would get my paycheck every two weeks and before I knew it, it would be all gone when I actually needed it to pay bills. It was a complete lack of responsibility, discipline and very bad spending habits that landed me in this situation. Heck, I didn’t even try to have a budget that’s how little knowledge I had with proper money management.
Luckily, for me, I was able to learn how to manage my money before it was far too late. I actually started this blog as a way to learn more and share my knowledge with others so that people like you can be successful at managing your money. I was even able to create a monthly budget that works for my husband and I. My goal is to save even more money than I thought would be possible so I don’t have to work near as much.
But my ultimate goal is for you to learn from my mistakes so you don’t have to make the same ones. I have compiled a list of 13 money tips that are easy to use and quick to implement so you can be on the right financial path.
I know you are ready to make the necessary changes, you just have to prove it to yourself and start. Even small steps are better than none when it comes to reaching for the financial future you desire. Keep reading along for money tips to improve your personal finances.
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1 | Cut Out Frivolous Spending
There is one sure-fire way for your budget to fail you before you even get to give it a chance. This budget buster is bad spending habits and frivolous spending. This means spending money in excess of what your financial needs are. With that said this means that you don’t have to give up your Starbucks lattes (within reason of course.) I’m talking about spending money on eating out every night, going on shopping sprees during the weekend, or spending excessively on cable T.V.
I get that you want to treat yourself now and then and that is more than okay, it is actually important! You should have fun, and go out with your friends just keep it within reason, and plan ahead for it by budgeting. By doing so you will be able to build up savings or be repay your debts.
To give you an idea of some spending you should cut here are some examples.
Coffee stops – make coffee at home
Ordering takeout for lunch – pack your meals and cook at home.
Cable T.V. – opt for Netflix
2 | Track Your Credit Score
Yes, this is so important and you may not be making it a priority.
Keeping a close eye on your credit score gives you a financial benefit many people sweep aside. By doing so you will be able to have an idea of how potential lenders may see you, this will determine how reliable for loans or financing you are considered to be. This is especially important when you are working towards purchasing a house.
I use Equifax for my credit score tracking needs, and I highly recommend that you try it. You will be notified of any credit score changes immediately by e-mail.
START YOUR FREE TRIAL FOR EQUIFAX NOW!
3 | Prioritize Your Debt Repayment
If you have a debt of any kind then you know the soul-sucking that it can do and the stress it can bring upon you.
Your debt repayment should be one of your main priorities because carrying large sums of debt can be the most detrimental to your financial future.
The way it works is the more debt you have the higher your monthly expenses are, so you should be doing all that you can to crush your debt. Another aspect to consider is compound interest, the more you owe the more you will be required to pay back due to interest.
This means paying back more than just the minimum payment each month. I know this is daunting to most people, especially if you are already living from paycheck to paycheck but any extra money you can pay to your debt is better than $0. Even $5 can make a difference so put it towards what you owe instead of a morning latte.
4 | Start Using Cash Only
Know the power of using cash and the financial benefits you could reap from it. By incorporating cash into your daily spending habits and using the cash envelope system of budgeting, which means using cash for the specific categories you may struggle with developing good habits for.
How it works is once you have finished spending all the cash you have for a certain category you are done. You can no longer spend any more money on that category.
For instance, once you spend all your money on eating out for the month you will have to wait until your next payday to replenish the cash for the category. Do not discredit this budgeting method it one of the most highly effective ways to curb any of your bad spending habits, so you can stick to your budget.
Using cash allows you to see all of your purchases clearly. It also gives you the opportunity to see how much money you have and thus make you way more aware of your habits.
This will lead you to spend with a purpose only which is the best money lesson you can possibly learn.
All I want you to do is try it, see how you change your spending first hand.
5 | Make Adjustments To Your Budget
If you have a budget in place but so far it has done nothing but fail, it is time to reevaluate so you can see where you are going wrong.
Whether your budget is failing because you can’t seem to commit to sticking to it or it is not up to date with your current expenses, either way, it is time to make some tweaks so your budget can flourish.
Generally, when you start setting up your budget you tend to be overly optimistic regarding your spending habits. I know this is true for me! I was budgeting for what ideally wanted my spending to look like not what it really was or should have been.
This all points to the denial you may be in regarding where your money is being spent. It’s time to face your actual expenses by tracking them religiously so you can work with actual numbers when sitting down to recreate a powerful budget that WILL work for you. This way you will be well aware of the true amount of money you need for expenses each month.
When you decide to track your spending you will also gain clear insight into what your bad spending habits are.
Never think that your budget will be the same from month to month. You must adjust and revamp constantly so you can keep it up to date. If it is not up to date then there is no way your budget will ever be successful if it is not meeting the needs of your current financial situation.
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RELATED POST: How To Create A Budget That Works – 6 Steps
6 | Try A Different Method of Budgeting
Sometimes when you make an adjustment to your budget it still doesn’t make it successful. This means it is now time to try a different budgeting method. Trial and error works. Try and try again until you get it right. The point is don’t give up on getting your personal finances in order.
I am someone that likes to see the whole month laid out in front of me. I’m a planner. So a month by month budget works for me. But another option for you is to budget by paycheck, some even believe this gives them a better idea of their cash flow. All in all, it will be a learning curve finding the right budgeting method for you.
When you have a monthly budget set up it gives you a month at a glance, so you can be prepared for all upcoming monthly expenses.
Just because I use the budgeting by month method doesn’t mean it will work for you. So give it a try, and if it doesn’t then try the budget by paycheck method.
7 | Get Your Spouse On Board
If you want to be successful with your personal finances you must first get your spouse on board. Budgeting and saving will not work unless you work together with your spouse and have a common goal.
Think about it, if one of you are working hard to get out of debt and the other just keeps spending money showing no signs of slowing down, how is that going to affect your debt?
If you have a budget but aren’t on the same page and both committed to it, your budget will fail the first week.
When you are in a relationship with joint finances you have to work together.
Set aside a half-hour every week to go over your finances together, this will keep them fresh in both of your minds! Resulting in your finances remains a priority for the long haul and you both being heard regarding how you feel YOUR money should be spent.
It also allows each spouse to take responsibility for their bad spending habits.
8 | Get Your Savings Automated
If you are serious about saving then you have to automate your savings! Make it a priority and you will actually be able to save for maybe even the first time ever.
Tip: Make Sure You Are Budgeting For Your Savings
When you automate your savings you set it up and you never have to think about it again. You don’t have to worry about making the transfer from account to account again.
Don’t know how to automate your savings? That’s okay all you have to do is set it as a direct deposit with your employer so that a portion of each check goes into a separate account. This option is not available for everyone but there is another way to automate your savings. You can go into your bank and set up an automated transfer right though them for each time a paycheck is deposited.
You also always have the choice of using money-saving services such as trim or digit. Theses services help analyze your spending habits. All while saving smaller amounts of money for you. Don’t knock it until you try it. When you use a service such as these you will be reaching your financial goals quicker when you don’t actually have to worry about sending money into your savings.
9 | Spend With Intention
After you made the financial choice to cut out frivolous spending and expenses so you can actively reduce your bills as much as you can, you will automatically become more conscious and intentional when you are spending your hard-earned money.
Before you choose to hand your money over for something, you should be sure of the consequences of doing so. You should take the time to understand your reason for making the purchase. Find out and dig deep to see if you actually need to make the purchase.
For instance, do you really need that new handbag or pair of shoes you see that are on sale or will you live without them?
Choose to control your spending, it won’t take long and you will see the ways big name brand companies try to entice you into buying their latest and great new products. This will give you the power to say no when you see their marketing tactics.
10 | Cut Your Monthly Bills
One fantastic way to cut your spending is by taking action and slashing your monthly bills.
One way you could save yourself money is by calling your service providers every couple of months to ask if they are currently having any promotional offers for loyal customers to take advantage of. Such companies are your phone, internet, and cable providers.
If they don’t have anything to offer you ask them if there would be an offer if you were considering dropping their services for one of their competitors. Trust me this works sometimes. I did this exact thing with Sirius XM radio services I told them I no longer wanted their services and cut the cost by over half!!! So try it, it works.
If they still don’t offer you a deal you should seriously consider looking into their competitors who can offer you the same services with a deal.
You could also consider giving up an expense all together temporarily to save extra money. For example, cut your cable for the summer months you’ll be spending way less time watching tv anyways.
Give it a try and save yourself cash in the process.
11 | Get Your Personal Finances Secured
You may not have even considered securing your finances if you don’t have many assets. But that doesn’t mean it still isn’t important.
One way to do this is by naming a trusted beneficiary in case anything terrible happens to you, this is one great way to secure your finances. If you have a savings account you will need to make sure it goes to someone trustworthy if you are no longer able to take care of it. This also goes for any life insurance you may hold.
Don’t put off keeping your beneficiary up to date. For example, if you are divorced be sure you change your beneficiary promptly! I mean do you really want your ex receiving your life insurance, savings, or 401K?
Do not wait to name a beneficiary, if you have any money at all you need to have one. Don’t delay you never know what tragedy could happen tomorrow.
12 | Religiously Check Your Networth
It is essential don’t overlook it! If you want to be financially successful you must stay on top of your financial health.
Tracking your net worth gives you the opportunity to see a balance between your assets as a whole (car, home, savings, retirement) as well as your liabilities (car loans, credit card debt, personal loans.)
If you currently have a negative net worth be assured it is not always a bad thing. It simply means that you are carrying more debt than owned assets. This would happen from carrying car loans, a mortgage, or credit card debt.
It is very simple to determine your net worth.
This is what the formula for figuring your net worth.
Your Assets – Your Liabilities = Your Net Worth
The overall goal is to have zero liabilities which means zero debt. That is why debt repayment should always be your main priority.
13 | Don’t Get Down On Yourself, Don’t Compare
Yourself To Others, And Strive To Be Patient With Yourself
You must not beat yourself up from past financial mistakes. Pick yourself up brush yourself of and be thankful for the lesson you learned because of the mistake.
Mistakes are inevitable! there is no way you can be well prepared for every financial crisis you will face in your lifetime. But the burden can be less when you have an emergency fund as a cushion.
The only thing that matters is how you act after you make your mistake. The failure doesn’t mean that you will always be bad at managing money.
Do not compare yourself to someone’s chapter 20 when you’re on chapter 3. It is too easy to start comparing yourself and start letting yourself get down on yourself for past failures or bad habits. You must first move forward and be confident in your own financial plan to reach financial security.
Honestly, you can’t compare yourself to anyone because you can only see what is on the outside, you don’t know what their reality is actually like.
So be patient with yourself, changing up your lifestyle to manage your money properly won’t be easy so give yourself the patience you deserve. Believe that it is possible for you to gain the financial future you desire and you won’t let challenges discourage you in your financial plans.
The Sum Up
Here’s a recap for you to consider when wanting to reign your finances in and start managing your money with confidence. This is how you can make a big impact on your personal finances:
- Cut Out Frivolous Spending
- Track Your Credit Score
- Prioritize Your Debt Repayment
- Start Using Cash Only
- Make Adjustments To Your Budget
- Try A Different Method Of Budgeting
- Get Your Spouse On Board
- Get Your savings Automated
- Spend With Intention
- Cut Your Monthly Bills
- Get Your Personal Finances Secured
- Religiously Check Your Networth
- Don’t Get Down On Yourself, Don’t Compare Yourself To Others, And Strive To Be Patient With Yourself
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