It is possible to improve your finances in six easy steps. It will require dedication and some sacrifice, but it will be worth it. Here are six ways to create a better financial situation.
1. Sell things you no longer use
You probably have things lying around in closets and cupboards that you haven’t used in a while or never plan on using. These items are worth trying to sell.
Maybe you have clothes your children have outgrown, but are still in decent condition. Children’s toys, kitchen appliances, and exercise equipment could also bring in some extra money.
Don’t overlook crafting items and stickers that other people can use. If you can sell locally, this is the best way to go as you’ll avoid having to pay for packaging and shipping.
Smaller items are better to ship than larger ones, which will cost more.
2. Cut out unnecessary spending
This will be difficult if you enjoy browsing stores, finding sales, and shopping.
If you want to see an improvement in your finances in a matter of months, changing this one habit will make all the difference.
One way to achieve this is to take a list with you when you shop. This way you won’t buy more than you need. Sales can be tempting, but you can avoid this problem by not browsing stores.
If something you need is on sale, you’ll see it. Otherwise you don’t need to pick up things just because they’re on sale. This is actually a waste of money and not a way to save money.
If you have a collection of nail polish, don’t buy more. Use what you have. If you see a new shampoo you want to try, wait until you finish your current bottle.
When you start using what you already have, you’ll cut out a lot of unnecessary spending.
3. Start saving money
If you don’t have a savings account, now is the time to set one up.
If you can only save a few dollars a week to start, it’s better than nothing. As the weeks and months go on, you can add more to your savings.
It’s important that you save money because you never know when you’ll need money for medical issues, a down-payment, or an emergency. Saving for retirement should also be a priority.
With the money you save not doing any unnecessary spending, you can save more money. Set a minimum amount that you’ll save every month and you’ll see your savings grow.
4. Pay off your debt
Whether you only have a few hundred dollars of credit card debt or student loans to pay off, paying it off will improve your finances. If you haven’t been serious about paying it off before, now is the time.
Between bringing in extra money and only buying what you need, you will be able to increase your debt payments. Paying off your debts will help to improve your credit score over time.
This is important for when you want to make large purchases and sometimes when renting an apartment.
5. Set up a change jar
At the end of each day, empty your pockets of change and put it into a change jar. This is similar to the change jar I use at home.
If you use cash more than any other type of payment system, you probably have change lying all over the place. Collect them and put them into the jar as well.
It might not seem worth it to save a few cents every day, but over the course of six months or a year, it will add up. It’s a good habit to adopt for life.
6. Learn to budget
Budgeting is a skill that will help you throughout your life.
If you’re used to pulling cash out of the ATM or using your credit card when you see something you like, you’re going to spend more money than you need to.
The first step is knowing how much income you bring in every month. You also have to know how much each of your bills are and account for those.
For things that vary such as groceries, you need to figure out how much you can afford and wish to spend each week.
Once you have a budget, you can learn to stick to it. You can give yourself a cash allowance each week, but once you’ve spent it, it’s important that you don’t go back for more until the next week.
Budgeting will save you plenty of money in the next six months and beyond.
When you learn good money habits, you will see an instant improvement in your finances. Let me know what you think about these tips in the comment section below.