It doesn’t matter how high your income becomes if you can’t handle your money the right way around. Just try to remember all the stories of celebrities who had paychecks worth millions only to go bankrupt in a couple of years. While your situation may not be so extreme, why ignore the possibility that you’re mishandling your money and look for a way to improve this situation? Here are five tips you might find useful.
Start using digital tools
The first thing you need to do is realize that you can use more than a calculator for your budgeting efforts. In fact, with so many amazing financial apps, tools and platforms out there, it’s completely irrational to try and do your budget the old-fashioned (pen and paper) way. Moreover, most of these platforms aren’t developed with tech-savvy users or professional accountants in mind, which is why they have a beginner-friendly learning curve. At the very least, you could try keeping your expenses recorded in Google Sheets, which would allow you to share the document with other family members.
Adopt a saving method
Another thing you could try out is adopting a method, a saving plan, that will help you make an emergency fund. As the rule of the thumb, an emergency fund should be three times the monthly expenses of your home, while you could probably go for more if you felt like it.
One of the most popular techniques is to start with an investment of a single dollar and then increase the money stash every single week. For instance, on the week two, you invest $2, while on the week 43 you put $43 into the savings account. In 52 weeks, you should have exactly $1,378 in your account, yet, there’s no reason why you should start with $1. With the help of a chart, you can track how much money you have in your account at any given point.
Invest when you have a surplus
One of the greatest mistakes that people make is believing that a deficit is the only problem that your budget can face, when not tending properly to your surplus may be just as dangerous. The first danger of this situation can be seen in a scenario where you start purchasing items you don’t need because you feel like this surplus will never be depleted. Another problem lies in the fact that you’ll no longer feel the pressure to be frugal in your financial dealings, which can be quite bad, on its own. The best way out of this unfavorable situation is to invest in stocks, cryptocurrencies, art, or better yet, buy precious metals to diversify your portfolio.
Make lists of priorities
A lot of people make shopping lists, however, why would this money-saving method only hold true in the case of groceries. Think about it, why wouldn’t you add items like purchasing a new property, buying a new car, installing solar panels or expanding your business to the list, as well? In this way, you can assign priority even to these massive expenses and get a better idea of what you’re dealing with, expenses wise.
Don’t ignore leisure
This particular tip is a bit controversial. You see, trying to deny yourself all the pleasure in order to save some money may sound rational, yet, the execution might be quite difficult. At one point, you might feel burnt out and decide to treat yourself. In this particular scenario, this vacation or a luxury item might be considered as unforeseen expenses, yet, what if you had leisure money planned in your budget? Wouldn’t this be a preferable scenario? This is a thought definitely worth taking into consideration.
If you’ve never done any of the above-listed things, this might be a challenge at first. Still, the difficulty of an effort can merely be decided by the height of a reward. With that in mind, improving your financial status for good and gaining the ability to do so in the future is definitely worth the effort.
Authors Bio: Diana Smith is a full time mom of two beautiful girls interested topics related to home design and latest DIY projects. In her free time she enjoys exercising and preparing healthy meals for her family.