Keeping a budget is not easy. Unexpected expenses are bound to arise. Being human, it’s normal to have wishes but often they exceed our existing possibilities. However, there are many tools, resources and strategies that can set you up for financial success.
First, you need to make sure you avoid common errors. Second, you can adopt new habits that will benefit your financial status. And last but not least, you can learn how to save money so you can reach your financial goals even faster.
Common money mistakes to avoid
There are many traps that could hamper your path to achieving your financial goals. It’s much better to know about them beforehand as opposed to learn from experience.
Spending every penny
It is impossible to save if you spend every dollar you earn. If you spend it all, you won’t get anywhere. It’s as simple as that. To know what you can spend, budgeting is key so you can understand where your money is going.
Splurging on housing
If you live in a big city, odds are housing eats up the biggest part of your income. There’s nothing wrong in getting room mates or even moving back with your parents for a while. There’s no shame in that and it’s certainly better than drowning in debt.
Build up a pile of credit card debt
It’s too easy to max out your credit card. What’s not easy is repaying that massive interest rate. If you rely too much on your credit cards, it’s time to reassess your finances.
Not saving for retirement
As far as this might seem, the sooner you start saving, the better. Time is on your side on this, so use it wisely.
Personal Finance Tips
Financial health is just as important as your mental and physical health. If it it’s in poor shape, it will take the other two down with it. So, adopting healthy financial habits is essential for your overall well being.
Create a Financial Calendar
Make sure that you mark important dates to avoid unnecessary fees for being late on payments or even worse, not being able to make them.
Track Your Net Worth
Your net worth is the difference between your assets and debt. This number will tell where you stand financially. It will warn you if you’re behind or show you are making good progress.
Set a budget
You need to know what you can spend. Zero budget does not mean spending what your earned since your budget will include a portion for your savings, loan payments and your emergency fund.
Take a minute each day to go through your transactions
Allocate at Least 20% of Your Income Toward Financial Priorities
Building up emergency savings, paying off debt, and padding your retirement nest egg.
Budget About 30% of Your Income for Lifestyle Spending
This includes movies, restaurants, and happy hours—basically, anything that doesn’t cover basic necessities.
Set your financial goals
Make sure your goals are smart: specific, measurable, achievable, realistic and timely. Make
Like in life, it’s important to set your values. For examples, don’t waste money on junk food or anything that is ‘poor fuel’ to your health but allow yourself to splurge on something that improves your well being.
Eat the elephant one bite at a time
If you set a very high goal, you might get demotivated easily. So, break it into smaller bites. Anything is possible!
Banish toxic thoughts
As tacky as it sounds, not believing you can do something creates a self-fulfilling pr
Get your body in shape
If your body is in shape, you will be more productive and able to earn more.
Negotiate More Than Your Salary
Work hours, your title, maternity and paternity leave, vacation time, as well as which projects you’ll work on and with who are just as important and carry a value of their own.
Spend on experiences, not things
The positive emotion you gain from experiences will last longer and give you more happiness in exchange for your hard-earned dollars.
Spend on the real you – not the imaginary you
It’s so easy to fall into a trap of buying for a diva. Do you really need a red-carpet dress you will not have the chance to wear in the near-future, if not never?
When you get a raise, raise your savings too
Savings should be a non-negotiable part of your monthly budget. When your income increases, increase the percentage of your savings. There can never be too much savings- you can always invest the
3. Money-saving hacks
The more you can save, the more quickly you will be able to reach your goals. Whether you want to buy a new dress, a house, splurge on a trip once COVID-19 is behind us, or just get out of debt, saving can never hurt you.
Sleep on big purchases
At least you increase your odds of being wiser in the morning.
Never spend more than you have
As tempting as it is, overdrafts come at a price, and quite a hefty one.
Try a no-spend-challenge
Make it fun by challenging yourself not to spend on anything more than basics for one month. You will increase your self-confidence and see how much power you truly have over your finances. Going minimal can even be fun – it’s a lifestyle statement.
Use money-saving apps
Considering we use our phones for pretty much everything, why not install apps that reward you when you shop at your store. They will help you save money on things that you already buy.
Cut your utility bills
Just by installing low-flow faucets, you’re already on track. But, these efforts don’t even have to be financial investments as you can simply take the time to seal the cracks around your windows and doors to avoid wasting energy. You can also compare providers and services such as by Xoom Energy to get the most affordable rate there is. Comparing brands is always a good idea in any category.
Conclusion – Focus!
When you are focused on reaching your financial goals, you will identify many ways to save money and spend your hard-earned dollars more efficiently. Remember, your energy (and money) go where your focus is. Make smart goals and remember that you are the boss of your finances. Most importantly, learn to appreciate what you already have as we often forget to stop and smell the roses – and forget how rick we already are.