words Al Woods
We all have a certain amount of money we earn, a certain level that we spend, a certain amount in our savings, and a certain level of debt. Sometimes you will find your money threshold doing very well. Other times, your threshold can be worrisome, which can add large debts and put you under financial stress.
The question is, can you do things to switch the statistics to turn them around in your favor, and if so, what can you do? The answer to this is yes, absolutely. Here are 7 financial decisions you can implement today, which are all in your hands to achieve better financial management:
1. Live According to Your Means
Most people live past their means. People who live according to their means only purchase what they can afford. They might relocate to a less expensive area or downsize their home. True, it might mean foregoing some luxuries, but you will find that you can get along very comfortably without those so-called luxuries.
2. Make Use of a Budget
A budget that isn’t used will add no value to your financial situation. You don’t have to spend more than a few hours each month to align your spending with your earnings. You need to refer to your budget every once in a while to keep it updated. When this is done, it will be your guide in knowing when to make financial changes and which areas need more management than other areas. Also, by using professional wealth management services, you can receive expert guidance in creating and maintaining an effective budget that aligns with your financial goals. These services provide ongoing support and monitoring, ensuring that your budget remains up to date and reflective of your evolving financial circumstances.
3. Manage Debt
There’s no debate that debts can run all pockets dry. If you can’t avoid debt, it has to be handled immediately. When debts get higher than what you can manage, start by paying off smaller debts first. It’s common to find areas of your budget that you can minimize your spending, or even completely cut out, at least for a while till you get back on track.
The general rule of thumb is to save 10% of your income every month. It’s the ideal way to start when you don’t know how much you should attempt to save. The average household income in the US is $61,372, so it will differ in how much you can save according to your salary to be able to reach that $1million mark to have ready for your retirement, which is often suggested. Besides being a retirement fund, a savings account could also be used as an emergency fund or used to set other financial goals. For extra financial security, a savings account will prove to be a vital asset for your finances.
5. Finance Through Cash
Credit cards, when used correctly, are a great way to manage your money, but we know how they can also send our finances spiraling out of control. When you finance your entire lifestyle with credit cards, it’s all too easy to go wild in purchases that can lead you too much in debt and being in debt to different sources. Deciding to stick to cash payments when you can, will make it more difficult for you to pay everything via credit.
6. Compounding Money
Financial success has as much to do with making money as it does with watching spending habits. For money to compound, you need capital, growth, and time. Your money won’t double every year, but investing your money is going to increase with a smart investment. You can invest a relatively small amount of capital and find yourself receiving a decent return on that investment. There’re no two ways about it; if you want money to make money, it has to be invested. Always weigh out the pros and cons of the type of investment you might be considering.
7. Find the Best Prices
Whether it’s money spent on a trip, an item or a service, you need to find the best for the best price. Use deals, coupons, and discounts to your advantage. Additionally, there are various monthly services that you can pay each month that could be exchanged for a cheaper and similar service, maybe even providing better services.
It takes practice to stabilize your finances so that you have enough to live comfortably, be free of debt, and have enough to save. A large part of your financial security doesn’t always have to do with the political or economic situation around you. A substantial part is in your hands to make the right financial decisions.