Have you been having problems trying to make ends meet lately? If this is the case, then you’re not alone. And for good reason. In this world of infinite needs where time is often a scarce commodity, we tend to make dozens of financial decisions a day that usually goes unnoticed. The thing is, they are not always the smartest ones for our pocket. So, how about we shed some light on a few of those choices which make our bank accounts delve into the red? Better still, here are 7 simple tips that anybody can follow to break bad money habits and improve your finances, as from today.
1. Pay yourself first
Yes, we do know it’s hard. And yes, there always seem to be a myriad of reasons not to do it: bills, student loan payments, insurance and your old reliable car which, for some odd reason, just wouldn’t start this morning. But you know what? Just do it, anyway. Take a portion of your income every single month and put it away as soon as possible into your savings account (Tip: online accounts do tend to pay you a higher interest rate than regular ones). Once you’ve set aside some of your money to save, you can then set up a plan to pay the bills and even a bit of money aside for fun (hey, after all, we’re not monks, are we?). Ideally, use a saving account that you don’t have online access to or a debit card for – you’ll be less likely to withdraw money from it then.
2. Get rid of your debt
Debt is a burden: it takes away resources from you and limits your choices. You need to be debt-free. However, just paying the next installment on your home theater while taking a new credit plan for that brand new smartphone won’t do. You need a solid plan to get out of debt. Pick your favorite afternoon, grab a cup of coffee and take some time to think it through. Once you’ve set it up, stick to it. In fact, you can even come up with some sort of visual reminder that you can check often as you pay down your debt. It will help you remain focused and motivated.
3. Think before you buy
How many times have you found yourself buying some gadget you don’t really need, just because you followed the last minute impulse? If you’re anything like us, the answer is many times, probably. Unfortunately, right now all there’s left from those purchases is a lot of useless stuff cluttering your house and a big hole in your budget. Now, how about you try this: next time, before you buy something, think it over for a while. Anywhere from a few minutes to a couple of days will do. After a while, you’ll be amazed how much money you will have saved on stuff you really never cared about in the first place.
4. Set up a plan before you go to the grocery store
Take some time every week and try to decide in advance your meals for the following seven days. Once you do that, create a list of the groceries you’d need to make those meals. Only then should you go food shopping. This way, you’ll be able to buy only the foods you really need and take advantage of any coupons that might be available in your local stores. Also, it will be less likely you’re tempted to buy food that you won’t need for the week ahead. Another tip: Never go shopping when you’re hungry – you’ll end up buying more food than you need because your eyes will be bigger than your belly!
5. Spend less on entertainment
Reducing your expenses on entertainment doesn’t mean having less fun. In fact, more often than not, the opposite holds true. You could, for example, get rid of cable or cancel any subscriptions to sites and magazines you’re no longer fond of.
You can always look for free public entertainment events in your area or choose an online tv service that’s cheaper than its traditional counterpart. Or maybe you can just hang out more with your friends or read a couple of more books each week.
6. Negotiate your credit card rates
Credit card interest rates are some of the highest in the market. What most people don’t even know is that they are actually entitled to negotiate those rates with their credit card companies. You should start by getting in contact with your credit card issuer and asking for a rate cut. If they refuse, you can always let them know you are considering transferring your balance to a different credit card (yes, you can do that, too) and see what they say. But check out other credit card rates anyway – you can often transfer your balance from one company to another and lower your debt immediately. Some even give incentives for doing so.
7. Choose the right car, and use it wisely
When buying a vehicle, always go for used ones and obviously check they are in good condition, too. Experts say new cars lose 10%-15% of their value the moment they’re driven off the car showroom. Also, make sure you choose a fuel-efficient model, as that in itself can lead to thousands in savings in the long run. What’s more, you can avoid doing unnecessary car trips by taking a minute to plan out your day carefully, such as walking or using cheaper public transport.