I enjoyed reading I Will Teach You To Be Rich when I was in my 20’s. Really simple financial tips that helped my improve my personal finances.
Perhaps the thing I’m most grateful for was opening a 401k at the age of 28. I started putting more money than I could afford until I hit the $17,500 self-employed contribution limit, and did so for four straight years. Now as I approach 40, I’m thankful that I started saving when I did because I can be more aggressive in doing things like starting a startup.
With that said, I always love a good tip on improving personal finances. So to get some financial improvement tips that aren’t online, I tapped into the knowledge of the people at Terkel. Here’s what people have done to improve their personal financial situations.
What Really Simple Thing Improved Your Personal Finances?
Looking for easy ways to improve your personal finances? We’ve gathered 14 practical tips from professionals such as Administrative Managers, Founders, and Community Experts. From using cash over cards to segregating funds for budgeting, these simple steps can help you take control of your financial future.
- Use Cash Over Card
- Pay Bills on Time
- Limit Credit Card Usage
- Reassess Automatic Expenses
- Invest in Education
- Reduce Food Delivery Costs
- Long-Term Index Investing
- Delay Purchase Decisions
- Eliminate Unused Subscriptions
- Automate Your Savings
- Monitor Your Spending
- Curb Lifestyle Inflation
- Budget-Friendly Meal Planning
- Segregate Funds for Budgeting
Use Cash Over Card
To improve my personal finances, I decided to use cash over card whenever possible. It was surprisingly simple, yet made a noticeable difference. At first, it felt strange to only bring along enough cash for the day instead of relying on my credit or debit card. No matter what I wanted, if I didn’t have the cash, I had to put it off until next time. This helped me stay aware of how much money I was actually spending and encouraged me to think more before making purchases. After a month of using cash over card, I noticed that my budget was better balanced—and that’s incentive enough to keep doing it!
Pay Bills on Time
Paying bills on time not only prevents costly late fees and interest penalties but also shows lenders that you are responsible with your finances. A good credit score is essential for gaining access to additional credit and other financial opportunities, and paying bills on time helps to maintain or even improve your credit score. Additionally, it demonstrates fiscal responsibility and can give lenders confidence in an individual’s ability to repay debt. By ensuring I clear my bills on time, I can keep my financial matters in order and ensure long-term financial security.
Limit Credit Card Usage
If you have a large number of credit cards, you’ll be tempted to spend more. If you stay within your means and have just one credit card, you’ll have more control over your spending. I have only one credit card and pay it off every month. This helps me avoid interest charges, and I don’t feel pressured to overspend. By keeping only one credit card for emergencies, you can avoid racking up more debt.
Reassess Automatic Expenses
Most people have 1-2 credit cards attached to every subscription and annual contract. Call the credit card company and ask for a replacement. If they ask for a reason, just report it as potentially compromised. In that case, they will change the number. Once this happens, it will cascade into a series of failed billing attempts. It’s at this point you can reevaluate your automatic spending. Each time you have to re-enter card details, ask the question, “Do I really need this?”
Invest in Education
An uncommon example of something I did to improve my personal finances was investing in knowledge. Instead of spending money on new clothes or a fancy car, I chose to spend it on education and classes that taught me valuable skills. Investing in my knowledge expanded my earnings potential and helped me land better job opportunities long-term. The returns from doing this have been much greater than spending money on material items, and it has empowered me to save more for retirement and other financial goals. Overall, investing in knowledge is one way I improved my finances by increasing my earning potential down the road.
Reduce Food Delivery Costs
The explosion of food-delivery services such as Bite Squad, DoorDash, Uber Eats, etc., is a very good development overall. It was especially useful during lockdowns, and it seemed like everyone took advantage of it. But many of us discovered the added cost of having food delivered to your doorstep versus taking an extra 10 minutes to drive to the restaurant and pick it up yourself was sneakily high. I decided to not only cut back on eating out but also on having restaurant dinners and lunches delivered to me. The savings have been significant, and I would encourage others to do the same. It will alleviate the strain on your monthly budget.
Long-Term Index Investing
To enhance my personal finances, I adopted a simple investment strategy: continuously allocating funds to the S&P 500 index. Contrary to the widespread belief that successful investing necessitates expertise and entails considerable risk, even basic investment methods can produce notable returns and exhibit long-term resilience.
The S&P 500 index has consistently generated an average annual return exceeding 10% over the past five decades, outpacing a majority of alternative investment opportunities. I have effectively improved my financial position by prioritizing a long-term investment perspective and regularly contributing to the index.
Delay Purchase Decisions
Impulse shopping can be costly, plus you end up with things you don’t really need. One way I overcome this is to sleep on buying decisions. If I’m still thinking about that item the next day or week, then I’ll consider purchasing it.
This approach helps me decide whether I’m trying to satisfy a real need or just a temporary feeling. I’ve saved hundreds of dollars this way and feel more in control of my spending.
Eliminate Unused Subscriptions
One really simple thing I did to improve my personal finances was to cut down on unnecessary subscriptions. I realized that I was paying for multiple services that I wasn’t using regularly, like streaming platforms and gym memberships. By canceling these subscriptions, I was able to save a significant amount of money each month. I also made sure to carefully review my bank statements and credit card bills to identify any other recurring charges that I could eliminate. This small change helped me prioritize my spending and focus on the things that truly mattered to me.
Automate Your Savings
Personally, I found that setting up automatic transfers to my savings account was a really simple yet effective way to improve my personal finances.
It’s almost impossible to manually transfer money to savings every month, but with automatic transfers in place, you can save without even thinking about it. I set up a transfer to happen on payday, so I never even see the money and it goes straight to my savings before I can use it for day-to-day expenses.
It’s a small adjustment that has made a big difference in my financial stability and allows me to build up my savings effortlessly. Give it a try!
Monitor Your Spending
One simple thing I did was to track my expenses. I wrote down everything I spent and reviewed it regularly. This helped me identify areas where I could cut back and save. It’s a small change, but it can make a big difference in the long run. Give it a try!
Curb Lifestyle Inflation
It’s fairly common for younger employees who begin earning higher salaries to level up their lifestyle and develop expensive tastes. While it’s okay to indulge every once in a while, lifestyle inflation can be challenging in the long run. Your bills, basic requirements, and some luxuries here and there are valid and natural. However, it’s crucial to remember that a higher income in the future is never guaranteed, and this is why one should keep re-evaluating their budget and understanding where they can curb their expenses. Finding the balance between being too frugal and too lavish, early on, can serve you well to build a long-term approach when it comes to personal finances.
Budget-Friendly Meal Planning
I plan my weekly meals and write down the ingredients needed to prepare them. Later, I try to find alternatives for the more expensive ones, which is much easier to do than I ever imagined. The first week I tried this strategy, I decided to calculate how much money it would help me save, and I discovered that I had spent 25% less than the previous week! I also found I wasted less food because I only bought what I needed for the week.
Segregate Funds for Budgeting
As obvious as it sounds, for many people, controlling one’s spending has become more challenging in the era of online banking. Personally, I had a tendency to undervalue the amount of money spent when using a debit card. Cash flow has always seemed to be much easier to control when it comes to paper money. Maybe the tangible element in it was the reason?
Such a feeling of lack of control led me to regularly transfer some funds to another account. I imposed on myself not to use them no matter what. As a consequence, I can use my first account to cover ongoing expenses and everyday pleasures under one circumstance: I must stay within the budget no matter what. It takes some self-discipline, but the feeling of being in charge of your finances is—nomen omen—priceless.
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