Few things feel worse than not having a secure financial life. But this isn’t an uncommon phenomenon. Only about 30 percent of people in the United States are in a situation that’s considered “financially healthy.” If you’re in the majority, you probably want to have more security in your life. Here are five ways to regain control of your personal finances.
Create Saving and Investing Goals
Chances are, there are some things you know you want to do in your life. Maybe it’s traveling the world, sending your kids to college, or just retiring on time. No matter where you want to go, you won’t be able to get there if you’re finances are a wreck. It’s smart to build saving and investing goals that coincide with your life goals. Creating timelines for all of these will help you stay accountable to yourself.
Create a Budget
Budgeting is one of the most important steps in regaining control of your financial situation. You need to see exactly where your money is going in order to start spending more effectively.
There are a few steps to building a budget. First, add up all your income and expenses. It’s key to note that these aren’t going to look the same each month if you have variable factors. This can be made a lot easier if you designate between fixed and variable income and costs. Once you’ve added up net cashflows, continue tracking your spending and make changes.
It should be noted that modern technology is making budgeting easier than ever before. People can now skip all the paperwork of budgeting, and manage money with an app. This can save you a ton of time, while also potentially improving accuracy. Some apps, such as Clarity Money, will even make suggestions to users based on their activity. If you’re not using your subscriptions, it’ll suggest you cancel them. There’s no reason to not utilize such a helpful free service.
Automate Recurring Payments
You probably have a lot of bills you need to pay every month. And if you’re like most people, you might not remember to pay them every single time. Setting up recurring payments is a great way to avoid late fees associated with late payments.
It’s important to note, however, that you might not want to do this with bills that fluctuate each month. For instance, your rent or mortgage payment is steady. Your heating bill is not. The drawback of automating payments is that it can lead to over-drafting charges if you don’t have enough money in your account.
Negotiate Bills and Don’t Over-Insure
Utility and other service providers want to get paid. If you’re struggling to make your payments each month, there’s a chance they might work with you to set a lower price. Try explaining your financial situation to the companies. They will be even more likely to listen if you do some price comparisons with their competitors beforehand.
You should do this same process with your insurance payments. Shop around to find a better rate. Present this to your current provider, and switch to somewhere else if you can save money. You also want to ensure you’re not paying for too much or too little insurance. Having too much means you’re going to be throwing away money. While have too little exposes you to the risks of a major event wrecking your life.
Sell Things You’re Not Using
One of the best ways to boost your finances is finding ways to generate cash flow. There are few quicker and easier methods than selling some of your things. There are many websites, such as eBay, that let you list your items for sale online. Getting some additional money from these sales can set you up for a much brighter financial future.
Reclaiming your finances can feel like a daunting process. It’s not impossible, however, if you take it seriously and follow though with your intentions. Having a stable, healthy fiscal life can make every other part of your life better.