If you have spent the majority of 2018 chasing your tail when it comes to your finances, it’s time to take a proactive approach to money management. Rather than worrying about how you will pay a bill or save money for a rainy day, you must look for ways to improve your bank balance.
You’ll be glad to know there are many tactics you can try to say goodbye to debt and build a healthy nest egg. Simply find out how to take control of your finances in 2019.
Gain a Thorough Understanding of Your Outgoings
Many people manage to overspend because they fail to track their expenses every month. If you are scratching your head about why you can’t pay a bill at the end of a month, or find you’re regularly dipping into your savings, take it as a clear-cut sign that you’re living beyond your means.
To improve your finances, write a list of all essential payments that leave your bank each month (rent/mortgage, utilities, and groceries) and then narrow down where you are wasting your money, such as on takeout, store-bought lunches, or clothing, and adjust your lifestyle accordingly.
Start a Savings Fund
Are you one of the millions of Americans who have saved very little or nothing? A recent survey found that 65% of the population have next to no savings, which can leave them in financial jeopardy should they receive an unexpected bill.
There are numerous ways you can start a savings fund. For instance, you can reduce your outgoings and add the excess money into your emergency fund. You also could start a side-hustle or sell your unwanted belongings, and the extra income could provide you with greater financial freedom.
Plan Ahead to Enjoy Greater Wealth
Many people make the mistake of opting for an immediate reward over-focusing on their long-term financial goals. It might be helpful to change your inclination to spend over saving. Simply consider how far ahead you think about your finances. Is it one week, one month or five years? A study found that people who earn $50,000 per year and plan ahead can save more money than those who earn $100,000 and fail to do so.
Improve your financial future by developing a one-year plan before moving onto a two-year, three-year or four-year plan. Visualize where you will live, how you will spend your time, and the trips you intend to go on, so you develop a savings plan to match.
A Proactive Approach to Your Financial History
A poor financial history can, unfortunately, impact your future. For example, a poor credit score can prevent you from being accepted for a mortgage or loan, while a negative banking history could result in you being refused a bank account.
If this is the case, you must take action in 2019 to resolve any issues and get your finances back on track. For example, paying your debts on schedule can help you to improve your credit score. You also could opt for prepaid debit cards to make payments if you’ve been rejected for a bank account. Find out more about the credit system for checking accounts here.
Pay Off Highest Interest Debts First
Quickly cut back on your outgoings by paying off your highest interest debt first. The sooner you eradicate the bill from your monthly budget, the more money you’ll have available each month, so the easier it will be to pay off any remaining debts.
High-interest debts usually include credit cards, personal loans, and store cards. However, review the terms of an agreement to ensure you don’t receive a penalty for an early repayment.
Browse the Market for the Best Deals
If you struggle to save even a few dollars each month, it might be helpful to browse the market to receive a better rate on your household bills. Slash your expenditure by finding a better mortgage deal, cable package, cell phone provider or insurance rate.
By doing so, you could potentially save yourself hundreds or even thousands of dollars throughout the year, so you’ll have no excuse not to build an emergency savings fund.
Make Your Money Work for You
The right investment opportunity has the potential to augment your money. However, before you seek out financial investments, you should establish how much cash you have to spare, so you don’t risk your home or savings. It’s also important not to rush into any investment decisions, so always weigh the risk against the potential reward.