The key to financial success is competent management and control of your budget. Making steps to improve your finances is the right thing to do at any time of year, and a key factor for becoming rich nowadays.
Most people prefer to start their financial plan at the beginning of each year. Your approach of alleviating your budget should be the same regardless of the time of year and circumstances. By following these simple tips, you will be able to see an improvement within a month.
Table of contents
1. Evaluate and improve your current financial status
Financially, you cannot begin to grow if you do not know where you are now. It’s time to put everything on paper and see how much you make and spend per month.
Once you see the physical numbers, you will be able to assess the strengths and weaknesses in your budget. Then you can start to implement changes to achieve your future financial goals. Be honest and realistically assess your current situation. Think about what you want to achieve shortly and if it is achievable with the budget you have right now.
Use this as an impetus for your first steps in the right direction. When creating your first budget plan, you need to:
- Include your current monthly spending broken down into categories (groceries, rent, car, etc.)
- Put your full income including other revenue streams like freelancing or outsourcing.
- Be clear about how you can save money every month.
- Use online financing tools or apps like Mint, Wally or Level Money
- Put on paper your lifestyle and financial goals for the next month and year.
2. Work hard to increase your current income and skills
After you have created your financial plan, it is time to start working hard on achieving your goals. Always keep in mind your full plan of action. It is clear that you will not be able to save thousands of dollars ceasing to drink coffee in the morning or by eating take-out food. These are the first steps of your adventure called “how to become rich.”
First, find out your growth prospects in your present company. Maybe the neighboring department is going to freeing up space that suits you better. Alternatively, you may be offered a higher role in the company with a higher salary. Make changes to your plan as soon as you get the new numbers.
On the other hand, if you understand that with the current skills you can earn more, then start looking for a new employer. However, do not do it the next day. Initially, test the soil for possible options. The search may take several months, so be patient. Only when you find the perfect place to continue your career, make the plunge.
3. Think about additional ways of earning
In the Internet age, you can get any part time job within minutes, after searching through the online bulletin boards. Many successful entrepreneurs have multiple streams of income that gives them more opportunities.
Start searching for part-time work, which can provide you with extra income each month. Watch videos, read books and visit courses. Perhaps one day this can turn into something beautiful that will bring in lots of extra revenue every month.
Here are just a few ideas that can earn you extra dollars in your spare time:
- Start working a second job part-time during the weekend
- Rent the spare room in your house or apartment
- Open your own online store and start selling handmade products
- Offer your expertise to various websites and portals as a freelance consultant
- Create your own personal blog and start writing on an everyday basis
- Help students during their exams by teaching or mentoring them
4. Start saving on monthly basis
Once you determine your financial goals and set a plan, you need to start saving money. Divide your spending into groups. First one will be”cost of living” (rent, bills, buy food, mortgage). The second one will be “personal expenses” (entertainment, holidays, Hobbies, dinners) and savings.
In savings group you can include two types of accounts:
- Retirement saving plan
- Emergency saving plan
In these accounts, put down the money that remains after all the necessary expenses. To improve the performance of these plans, we advise you to defer a certain percentage of your income each month. In this case, you will be able to make this process automatic. It’s effortless, just go to the nearest branch of your bank.
It is also recommended to schedule transfers to your savings accounts at the end of the month. Aim to put 10 percent towards your retirement saving plan and from 5 to 10 percent towards your emergency saving plan.
5. Avoid debt at all cost
How can you become rich if you have debt? Try to avoid it at any cost. Your mortgage is an investment into yourself and your families as well as a car loan. We won’t take them into account. However, credit cards are a real problem in modern consumer society. Many things people buy without thinking about how they are going to return the money back.
Be careful with credit cards. Use cash or checks when possible. This should be only an emergency, not a luxury that the bank gives you for free. Remove credit card from all of your online accounts and do not take it to the grocery store. This will help you to develop the habit of using alternative methods of payment and avoid going into debt. Such methods will also help you to avoid wasting and will free up your space at home of unnecessary things.