In this article we will give you the knowledge and tips to take control of your finances and start making your money work for you. We’ve compiled some of the most useful and interesting tips and tricks that will help you get back on track financially and accelerate your financial growth.
Finances — a boring topic for some and a favorite topic for others. Wherever you lie on the spectrum of finances we are sure we will be able to give you some new knowledge you haven’t seen or heard before. Whether you are living paycheck to paycheck, trying to pay off that mortgage or those student loans, or just curious about anything and everything to do with financial tips and tricks; we’ve got you covered.
The majority of us get our paycheck, then discount the bills and expenses we have, then we save the rest of the money left over. It seems rather obvious. First you need to take care of your monthly obligations in terms of payments before you can think about giving yourself something right? Actually this may be counter productive and may be hindering your ability to get ahead. Just by changing one simple thing you can drastically improve your savings.
By paying yourself first you not only guarantee that you are setting aside for your savings, but also it will make you more likely to trim unnecessary expenses. Now that you have money going to your savings each month you are forced to make due with what is left over. This means making more decisions on what is needed and what isn’t. When you are living the other way around your frivolous expenses are treated as your way of payment to yourself since at the end of the month almost nothing is left over for you to save. You end up feeling like you are just working for the companies that you owe money to each month. $20 to eat out in a restaurant, $5 on coffee, $15 for the movies. You rationalize these expenses that add up over the course of the month as your form of payment. In your mind if you aren’t going to be taking home anything after your monthly expenses then why not treat yourself a little bit here and there.
By flipping this on it’s head and first beginning each paycheck by paying yourself and then your expenses you completely reorganize your priorities. You convert yourself into the most important expense or monthly cost. After all it is you that is bringing home the paycheck and you that deserves the money. So by paying yourself first you are rewarded with the good feeling of progress by putting aside money each month. Now that you are finally making some progress in your savings and feel like you are finally getting ahead you will be much more decisive on what you spend your money on. After all you are getting paid now. So those frivolous purchases you used to make before saying well I don’t have anything left over at the end of the month so I might as well enjoy a new pair of shoes or a nice dinner are now directly affecting how much you are able to pay yourself. And as a result you are more likely to cut out these unneeded purchases and as a result pay yourself more.
Now that you have started to put money away each month what should you do with all the money?
First, setup an emergency fund for yourself. This will give you the peace of mind and also the security in case of any unforeseen event. An expensive car repair, a medical issue, getting laid off from your job. Nothing is worse than living in fear of the unknown. The world is full of dangers and nobody is immune. So first give yourself the peace of mind by creating a fund incase anything might happen.
Once you have a good enough sized fund to make you feel safe in the event of something unforeseen, make sure you are limiting your debt as much as you can. Credit cards for the undisciplined are an easy way to get in over your head with spending over your means. Put your credit cards to work for you by paying off the balance every month to avoid interest. You will accumulate points or cash back as well as raise your credit score to help you down the line when applying for a loan or a mortgage.
This is just the surface of the vast world of finance but we think these tips are the most crucial and impactful changes one can make to finally take control of their finances and start to get ahead.