Maybe you’re a college student working a part time job, a single parent supporting a house full of kids, or you’re just in a situation where money is tight: sometimes it feels like you just can’t get ahead when it comes to your finances. If you’re looking for a few simple ways to turn things around and alleviate your money stress, here are three simple steps you can take to get your finances going in the right direction…
Increase your savings rate: Figure out how much money you’re putting into your savings account and your retirement accounts each month and divide that by your monthly salary. This is your savings rate. Once you’ve got that figured out, try to slowly increase the amount you’re saving each month. If you’re living by a budget like the 50/30/20 rule, you should be saving around 20% each month. Even if you’re not saving that much, try increasing your savings by 1 or 2% next month and see how it affects your budget. If that works for you, keep increasing your savings a little each month for as long as you feel comfortable.
Ditch some bills: We all have bills that we pay each month that are completely worthless. You may think that sounds crazy, but if you think long and hard on it, I’d be willing to bet you could come up with a few things you could discontinue without it hurting your feelings too much. Even if it’s only 20-30 bucks a month, you could turn that into a few hundred extra dollars in your pocket by the end of the year.
Create a goal and hit it: This doesn’t have to be a huge goal. We’re not talking mansions and yachts here. But maybe there’s an appliance in your house that you figure you’ll have to replace in the next year or two. Start looking at options now, find a price you like, figure out how much you need to save out of each remaining paycheck for the rest of the year, and by 2022 you’ll be prepared when that water heater finally gives out.