You earn enough money yet you are always broke. Your wish lists are never fulfilled because you never seem to have enough money to buy anything big. When emergencies come up, you have to borrow from friends and family to deal with the emergency. If one of these statements describe your financial life, then its time your finances got an overhaul. Here are the steps you need to take to get into better financial fitness.
1. Save immediately
One common mistake is to procrastinate on saving. You receive your salary but keep telling yourself that you will set aside some money for saving one of these days. Before long, needs have piled up and all your money is spent.
Avoid this by putting aside your savings immediately. You can even open a savings account at your bank, with conditions that make it easier to save.
2. Budget before the money arrives
It is easy to think that you have a lot of money before it comes in. So in your head, you plan all sorts of things knowing that you can never go broke. But before you are even halfway your wishful thinking bills, debts and home expenses have sucked your pockets dry.
Avoid the mid-month broke stretch by planning for your money even before it arrives. Since you most likely know how much you are getting, you can budget for it accurately. Determine what your most pressing needs are and pay them off first. Set aside your savings, utilities, insurance expenses and so on.
Remember to also budget for your fun and entertainment. With a simple but effective budget, you can enjoy an entire month without going broke. It just needs some planning.
3. Do not overwhelm your budget
The apocalypse is not coming so do not try to fit all the furniture and appliances you want to buy in one budget. Take it slow. Come up with a long term plan where you list those major buys you need to make. It could be furniture, a car, a home, an expensive vacation and so on. Then, divide these expenses into individual months so that each month has one major project. Some expenses can take 2 or more months to complete.
As you knock down each major expense, you will be motivated to keep going.
4. Increase your income
It is surprising that this piece of advice is not given more often. People are just told to save more. But even as you save, adding to your income can’t hurt either. This is especially important for natural spendthrifts who have a hard time keeping their expenses in check. Work as hard in finding additional sources of income as you do in saving.