4 Easy Adjustments you can do to Improve your Finances

According to The Australian Securities and Investments Commission (ASIC), more than 1.9 million Australians are struggling with accumulated credit card debt. It’s a problem not in Australia alone but in different countries like the US where credit card debts are at all-time highs. Don’t be a statistic – be smart and manage your finances.

Improving your finances

You don’t need to make drastic changes in your lifestyle to get results and improve your financial status. Starting small and going from there is the best way to do it.

The first thing you need to do is free up your debts. This will enable you to shift your focus on planning for the future. You can even use that opportunity to replace your car through car finance, or build your savings to enjoy a holiday.

To help you get started, here are some ways that are surprisingly simple and can help you start immediately.

1. Create and stick to a budget

Learning how to keep track of where you spend your money will ensure that you don’t overspend on unnecessary items. There are plenty of ways to do it. Whatever method you choose, a smarter spending habit should be your end goal.

An example that works is envelope budgeting and it’s primarily used for cash budgets. To start, take an envelope and label it with the corresponding expense like fuel, bills, groceries, etc.

Next, insert money in each envelope to fund each category. You should only spend the money you have allocated for each expense for this method to work. Ideally, you should also replenish the money once used.

For the tech-savvy, Excel or a smartphone app can help. You can easily monitor your income and spending in just a few clicks. Some mobile apps like Pocketbook have savvy functionalities like visuals and projections, smart enough to provide actionable insights to track your spending.

Get through the week before your next payday and live more comfortably without the stress by being diligent in sticking to your budget.

2. Break bad habits

As the saying goes: “Old habits die hard”. However, your commitment to improving your finances should be firmer. Look at your daily activities and immediately cut anything that you can live without from your expenses.

Coffee runs in the morning, impulse shopping – these are some of the activities that seem harmless but can affect the overall budget. Worse, they can even contribute to your growing debt. Good thing, there are alternatives to most of the things or activities you splurge on.

For example, you can start brewing your coffee instead of buying which can help you save $4 up to $6 per cup. You can also avoid impulse shopping if you understand the triggers and be better at dealing with them.

In time, there’s no need to miss your old habits after you stop them for the better and reap the benefits.

3. Stock your pantry and plan meals

An average Australian household spends at least $100 a week dining out. It could even be higher in some countries. To get ahead, plan your meals for the week and stock the ingredients in your pantry.

Come up with a weekly menu to identify the things you need on your shopping list. You wouldn’t want to drive to the supermarket again for the ingredients you’ve forgotten – this will cost you time and fuel.

In that way, you are keeping track of your budget and your family’s health at the same time.

4. Avoid credit card debt

The convenience that credit cards provide lead some people to unexpected debts. Before you know it, you’re spending carelessly with your most reliable plastic because you have formed a habit that you didn’t realize is affecting your financial status.

If you got into a serious credit card debt, prioritize repayments and resolve it as soon as you can. You will also increase your credit score with every payment you make on time. It can also help you improve your chances of successful loan applications in the future.

Most experts recommend shopping with cash. Seeing your money diminish physically will help you control your shopping and your spending habits in general. This way, you wouldn’t accumulate debts at the end of the month.

You owe it to yourself to live a more comfortable life, and it’s only possible if you handle your finances wisely and more effectively. Start making improvements now so you can enjoy a better financial status and not worry about your bills and other expenses as you used to.