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Ways To Improve Your Finances

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It’s never too late to start improving your finances. It is time to give your spending patterns a whole new look, to start saving more money in your savings account, and to spend better and wiser. If you’re at a complete loss for what to do, these three easy tips may just help you to get started.

1. Set A Budget

Assess all your monthly expenses, including spending on necessities (e.g. Bills, food items, minimum payments on debts, etc.) and spending on entertainment or social/private indulgences. This budget form may help you speed things up or remember things you may have forgotten otherwise. Subtract the total amount of expenses from your monthly earnings; the remaining amount of money is how much you can expect to have left at the end of each month if your spending pattern remains the same. If you are left with a negative amount, rework your budget until you turn up with a positive amount that you are satisfied with. Make cuts in areas that you can, especially money spent on unnecessary goods/events.

Also create a budget for your financial goals. Whether you are saving up for a retirement fund or a fancy vacation at the end of the year, find a place in your budget where you can set aside a certain amount of money to place in your savings account. If you have a lot of debt, skip this step for the time being – clearing debt is way more important. Once you’re comfortable with the budget you have created, put it to work. At the end of the next month, assess your budget and make changes if you are not satisfied. Never stop assessing your budget – review it every month in case overspending occurs or in case you can afford to save more.

2. Build Up Your Savings

In addition to the help of a fixed budget as mentioned above, here are a few additional ways you can boost your savings. Take advantage of your bank’s auto-draft feature. It schedules regular transfers of credit from your checking account to your savings account, and it removes any need for hands on involvement. Keep loose change and deposit them into your savings account whenever your piggy bank is too full. If you participate in rebate offers, deposit all of your rebate checks into a savings account. If you have recently received a raise in your pay, try to deposit a fair amount of that raise into your savings account.

The Employee Benefit Research Institute reports that people invest an average of 7.5% of their income into their retirement accounts, but most need at least 15% to be on track by the time retirement comes around. Keep that in mind as you start to manage your savings account better.

3. Cut Down on Expenses

It’s simple logic: when you cut down on expenses, you save money. Here are guides on how to save on various things, ranging from car insurance to groceries to phone services.

  • Auto Insurance – reduce coverage on older vehicles, use one insurance company for all insurance policies, raise your deductible, get a quote before purchasing, etc.
  • Cellphones – use apps that allow you to make calls and texts for free, purchase bundle services, use a prepaid plan or a plan that matches your talk/text requirements, etc.
  • Electricity – get an energy audit, use dimmer switches, keep your fridge and freezer full, air-dry your laundry instead of using a dryer, etc.
  • Gas – park further away and in the shade, check traffic reports, tighten the gas cap, shop online (free delivery!) etc.
  • Groceries – substitute food items, shop at drug stores, stack discounts whenever possible, etc.
  • Homeowner’s Insurance – get a quote before purchasing, don’t waste money on land insurance, improve your credit score, etc.
  • Phone Services ­–bundle your services, ditch your landline, use a phone card, etc.
  • Water – use your dishwasher, do not pre-rinse dishes, keep drinking water in the fridge, etc.

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