Finances are like fruit, they rot if you don’t take care of them.
Ok so that wasn’t the best metaphor, but hopefully it gets the point across.
Just like we wouldn’t like rotten fruit for breakfast we also wouldn’t want rotten finances to deal with on a daily basis (it seriously sucks to have higher credit card payments than your rent).
Now, this post was inspired by a few posts I had seen for 2018 on getting your finances back on track, and I thought, bingo! I’ll write my own version of those posts in this one post, hence: 9 Easy Steps To Get Your Finances Back On Track This Year.
Sometimes, it simply takes some sitting down with your finances to see what is and isn’t working, but what exactly do you look for, add, or take away?
Here’s a handy list to help you out on your finance quest. Let’s dive in.
Think About Your Last Year
Where exactly did your money go last year? Where was the bulk of it spent besides bills and basic necessities?
This might be harder to track if you haven’t kept a budget (even a halfway decent one can help).
Before you start trying to get your money back on track, it’s important to remember what your habits for the last 365 days have been.
That way you are more self-aware of what spending tendencies you have, what you bought that you didn’t need, and what you have to work on to make this year financially better than the last.
So sitting down and thinking about three financial habits you need to get better at is a good way to start. You are more likely to achieve your goals if you’re intentional and write them down on paper.
Organize Like This
Having a budget, a debt pay off plan, and then a savings plan can always be a good idea.
They don’t have to be complicated, they just have to outline the basic financial steps you’re taking each week/month to master your money.
- Here is how to create your own budget from scratch
- Here’s how to draw out a debt repayment plan
- And here is a great resource to decide a savings plan
All of this, plus your receipts and bills need to go in your own separate money folder.
Many people like the cash envelope system to keep track of their cash. Others like to use the zero-sum budget.
Really, it’s up to you and your lifestyle to see what works best for you.
But having all your plans and spending bills in one place can help with the money chaos come bill payment time or tax time.
Calculate How Much It Costs to Be You
It can be easy to get lazy and not take a closer look at how much you are paying each month for what. Heck, forget being lazy, some of us don’t even question the price of something at all.
Where exactly am I going with this? Being a little pickier with where your money goes can lead to a healthier wallet if you know how to do it.
This means you should read up on The Massive Guide To Save You Tons On Bills. ?
This is a guide complete with a table of contents that outlines ways you can save money on each part of your monthly bills.
While you don’t have to read it, the gist here is that you look at what is costing you and how you can cut that cost in your budget.
Knowing how much a month of your life costs (aka a budget) you can already put you on the path of saving more and spending less.
This can easily be done by:
- Setting up a simple Excel spreadsheet
- Keeping all your receipts to audit each month
- Being intentional and writing down everything extra you purchase and why (Need? Want? Impulse? How can you improve?)
Be Aware of Your Magic Numbers
That’s your credit score, silly, not your winning lottery numbers.
Before you start stressing out about all the things you need to do to increase your credit score, knowing your credit score simply means two things:
- You’ll know where you stand financially
- You’re more likely to do things to make it better (like making your credit card payments on time)
As you better your money habits, pay off debt, and hit deadlines right on the nose as you get your money back on track, your credit score will rise with your money habits.
And knowing exactly what it is makes it easier to reach your financial goals.
Get Rid of Extras
One of the easiest and fastest ways to get healthier finances is to simply stop paying for extras you don’t need.
Duh, right? But chances are, right now you are paying for things you don’t use, like:
- Magazine and newspaper subscriptions
- Cable TV that you don’t watch
- Memberships to discount programs you don’t use
- Club memberships you don’t use
Getting rid of extras will make sure you can redirect money that goes out of your pocket monthly into your savings account. Fixing your finances this year means not being unnecessary with your money.
You can very well do with that magazine that arrives at your door that you don’t ever touch (though I know, it can be nice to get an automatic delivery of a new shiny thing).
Set Up a System That Works for You
Setting up systems keep you from missing payment deadlines that can then decrease your overall credit score.
Something I like to do is moving the due dates of certain payments if I can, so they are closer to each other and they fall on days where I know I’ll have money in that specific account.
It’s a great idea if you have conflicting payment dates. It doesn’t hurt to pick up the phone and ask.
It’s all about making it easier for you to constantly meet your money goals.
For example, for the longest time I had trouble remembering to out away money from any income I’d get. I opened a bank account with Chime, and now it automatically rounds up the amount purchased with my debit card to the next dollar and puts it away in savings for me.
This adds up over time.
On top of that, I also get to automate a percentage of my choice to come out of my paycheck and into my savings automatically.
Pure out of sight out of mind genius.
As I always like to say in all my finance posts, when it comes to money, automation is your BEST FRIEND.
I LOVE that I don’t have to think about saving a chunk of my income every time.
If you’d like to get Chime as a supplemental bank account (or your main bank account) open an account here and start automatically saving money (on top of that there are no ATM fees, yay). You can get $25 dollars for opening an account and setting up direct deposit while funds last.
What Is Your Job Situation?
Can you ask for a raise? Can you do something to switch to a better department? Pick up a few extra hours a month? Can you possibly switch jobs?
…Or maybe it’s time to switch gears completely and start that online business you’ve been thinking about for months.
It’s always a good idea to reassess and question things that seem to otherwise be set in stone. It’s important to remember that a job doesn’t have to be forever, and that you can take the leap and try something new that might end up being better.
Add A Side Hustle (You Seriously Need This)
Chances are getting your finances back on track might mean needing an extra source of income to tie up some loose ends and pay off debt faster.
Extra money is always a good thing and can only work to your advantage. The problem is finding the motivation to make it.
Luckily there are ways to make a few hundred dollars from the comfort of your couch (and a laptop) that you can take advantage of, like taking online surveys.
As a quick example, with Swagbucks, you can do things like watch videos, play games and answer questions and get paid cash to do it.
You can get started here and earn $5 for just signing up and getting started.
Or you can start a side hustle and do some freelance writing on the side, or offer all types of paid services through Fiverr.
With the internet, the possibilities are endless.
To check out a complete list of side hustle ideas you can start to make this year your best financial year yet, here is a massive post I put together on the subject.
And, as a last suggestion, you can always start a blog to make a profit from home, though it’s TONS of hard work and definitely not a make money quick game, the payoffs in the long run can be immense. Here’s how you can get started.
Invest in knowing more about your money
That’s the simple way of saying, invest in educating yourself on your money.
Most of us like to think that because we own a bank account, have our credit card payments under control, and more or less have our budget under control, that we know most all there is to know about money.
But this couldn’t be further from the truth. There is SO MUCH to be learned about money, how to invest it, how to take better care of it, how to make more of it, how to multiply it, and on and on.
Investing in your education is one of if not the best thing you can do to improve your quality of life (and the one of those around you).
Read up on finances from some of the top rated books. Spoiler alert: Some of them are complete mindset shifters that will help you take a completely different view on finances.
Rich Dad Poor Dad by Robert Kyosaki: The gist of this book is— what the rich teach their children on personal finance that isn’t common knowledge but should be. Check it out for a mind-bending good read and good knowledge to get your finances in shape.
The Total Money Makeover: A Proven Plan for Financial Fitness: Dave Ramsey has become a well known financial figure. His book touches on a lot of important finance points everyone should read on.
The Four-Hour Work Week: This has been a life-changing classic book for many people around the world from Tim Ferris, a lifestyle blogger and ‘life hacker’. It touches on money, and how to stop the time for income trade that can be life sucking. Definitely a good read for a mindset change.
Crackdown on Your Finances
If there is any time to get on top of your finances it’s definitely now. It’s something you’ll look back on later and be glad you did. Time will pass anyway, and you decide where your hard earned dollars end up within a whole financial year.
Hopefully, these pointers helped out in getting you back on track and taking a look at where your finances are leaking. Now its time to think about all the awesome milestones you’ll hit this year.
How will you make this year your best financial year ever?