The 10 great strategies on how to improve your personal finances immediately
1. Know your current financial situation.
Before you can make plans to save for anything, whether it’s for your children’s education, retirement, or buying your dream home, you need to know where you are financially today. You may need to go to the trouble of getting a financial planner if you don’t know how to create a financial plan. If you know how to create a financial plan, you can save a good deal of money by hiring a financial planner.
2. Save regularly.
Acquiring the habit of saving is a good virtue. You’ll never know when you desperately need that extra cash when unforeseen events occur, such as downsizing or a loved one becoming ill, requiring extensive medical care and leading to high medical costs. As a guide, it is imperative that you have set aside 3-6 months of your current salary for emergency needs.
3. Control your cash flow.
No matter how wealthy you are, you must be able to control your cash flow. The simple rule is that what goes into your pocket should be more than what comes out of your pocket. You need to know what item is earning you income and what is causing you to spend.
4. Reduce your expenses
Start by keeping track of your daily, weekly, and then monthly expenses. Find those expenses that are not a necessity and eliminate them. A good example of this is paying for subscriptions to magazines you don’t read. When you have identified all of these items that are not worth your dollar, you can greatly reduce your expenses by 25-30%. It is advisable to have only one credit card so that you can keep better control of your expenses. Make sure you pay the full amount by the due date of each credit card bill before it becomes one hell of a debt.
5. Review your debts
As a general rule, your incurred debt should not exceed 30-35% of your total income. Gambling and vices are good candidates that can lead you into debt. Poor money management can also lead you into debt, even if you had won the 2 million lottery or inherited great wealth from your relative.
6. Be frugal but not stingy
Only buy products when they give you good value for money. It is wise if you know when to buy something quality and pay a premium rather than when to buy something less brand name but still serves the same purpose as a name brand item. If you were to always choose items based on cheap prices, that item could fail in no time and cause you to buy another, leading to higher expenses than you originally anticipated. You will also be labeled as tight-fisted, unwilling to spend money when absolutely necessary.
7. Review your investment portfolio
If you’ve invested in stocks, mutual funds (unit trusts), or multiple funds, you’d like to review them periodically. Your review period can be quarterly, semi-annually, or annually. For example, when you’ve done your quarterly analysis and find that the stock of the company you’ve invested in isn’t giving you the desired returns based on financial numbers or outside interference, you’ll want to replace those stocks with a stock of the company with better value. performance.
8. Inform yourself financially
There’s a wealth of financial information out there, and it’s free when you surf the Internet or go to your neighborhood library. You can attend seminars, read books, read newspapers, and listen to audio tapes, which are some of the ways you can gain more knowledge.
9. Be generous
There is a famous saying “You get what you give”. When you are generous, somehow the spiritual forces know it and reward you many times over. When you give, there is a natural tendency for the other person receiving to want to give back.
10. Pay yourself first
Before paying all your monthly expenses, you must cultivate the habit of paying yourself first. If you have a day job, when it comes to payday, you can start depositing, say, 5% of your salary into another bank account. You can gradually increase this percentage when you have more take-home pay or feel you deserve a bigger reward. Many people pay for themselves in the end. By the time they have paid other expenses, they will have nothing to pay for themselves.