Making changes today.

Turn Your Finances Around Now

Budgeting and financial planning can be boring. It is tough for many people to wrap their head around doing something that will help them 30 years from now. This is what stops so many people from making smart financial decisions. It is also what keeps them from even making smart decisions that will impact them today. If you are ready to change this, here are some things that you can do that will change your financial outlook now, not tomorrow.

1. Start Saving

Opening a savings account will make you feel good about your money and your security.

You might think of saving as long term planning but it can help you in the short term too. A savings account will make a drastic difference in your day to day life and the effect is instant. It just feels good to have a savings account, even a new one.

A well funded savings account will above all else give you a sense of security. Have you ever worried about what would happen if you get laid off or injured and could not work? Have you thought about what would happen if you got in a car accident and had to fix your vehicle? Sure you have insurance, but do you have the money for the deductible? A savings account will take that stress out of your life. If everyone had even a small savings, it would put the payday loan industry out of business.

The thing about saving is that it is addictive so you just have to start small. Let’s take just $50 out of each check. Assuming that you get paid twice a month, with interest, you will have close to $1300 in your savings account in a year. That is a decent safety net to have and you will want to keep it growing. As a bonus, as your money accumulates, you will be able to transfer into higher interest bearing accounts.

2. Make A Simple Budget

Making a budget will allow you to instantly recognize how you are spending your money. You can then make immediate changes to improve your situation.

If you want to start controlling your finances today, you need to see where you are spending your money. Take a few minutes and right down all of your fixed expenses. Rent/mortgage, utilities, car insurance, etc. Next budget a set amount for your other expenses like food, gas, entertainment. Be reasonable and write down exactly what you are spending.

Your budget doesn’t have to be in any fancy format, just writing it down will do. If you want to take it a step forwards, put it on a simple spreadsheet. Every computer has a basic spreadsheet program, it does not have to be excel.

Once you have your budget, compare it to your income. For many people a problem will immediately be evident. Is your income more than your expenses? Have you set aside money for saving? If you answered no to either of those, now is the time to run through your budget and make some needed cuts. Add a set amount for savings and make sure your total comes out below your income.

3. Cut Up The Credit Cards

Cutting your credit cards will immediately stop you from racking up new debt.

Calculate how much you pay in credit card minimums each month. For many, this amount is 300 dollars or more. The really sad part is that most of that amount is just interest.

Paying off debt is tricky but it starts with one step that you can make today. Cut up your credit cards. How often do you find yourself using your credit card to pay for something that you could have paid cash for? How often do you pay off a balance on a card just to charge it up again?

Change this cycle by making it impossible for you to put money on your cards. Once you do that, you can start making progress on paying off your debt. Even if you continue to just make the minimum payment, you will start seeing the balances drop.

After you have made this step, you can start considering really paying off those cards. Check out the debt snowball method where you pay off the lowest balance card first.

4. Set A Goal

Setting a goal will give you an instant sense of direction and motivation.

You need to have a financial goal so that you have something to work towards. Without one, you are just lost. This is perhaps why you have been unable to get your finances in order. If you do not have a clear goal, it can be hard to save because you do not know what you are saving for.

So, let’s take a minute and set a goal but keep it realistic. If you are 40 and have not saved a dime, it might be rather unrealistic to want to retire at 50. That being said, you still might be able to come up with quite a nice nest egg by 65.

Start putting just 400 dollars a month into an IRA earning 7% at age 40 and you could have almost $330,000 by age 65.

So, what is your goal going to be? Figure it out and then start working towards it.

5. Amplify Your Income

More income will give you more opportunities to live the life you want and save for the future you dream of.

Everyone says that they want to make more money but few people do something about it.

If you are being underpaid, there has never been a better time to change jobs. Employers these days are throwing all of their money at new hires and giving employees they have cost of living raises. It keeps existing employees complacent and allows them to attract the new employees they need.

Gone are the days where you could work at one company your entire life and be well rewarded. If you want a 10 to 20 percent raise, you are never going to get is staying put. Instead, get that resume in order and start looking for a job. Depending on the field you are in, you might even be able to allow a recruiter to do all the work.

Another way to amplify your income is to make the decision to go back to school, either for a degree or for advanced certifications. It is almost never too late to go back to school and improve your employability.

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James Car is a finance, loan and budget expert based in the United States. After attending Brookhaven college, he went on to become a successful entrepreneur. He now enjoys writing articles that help people save and make the most of their money.