If you are looking to improve your personal financial situation in order to achieve a goal, there are a few ways to do so. Although many of us believe that becoming wealthy is unattainable, it can happen over time with perseverance.
1. Set a Goal
As with anything you set out to accomplish, you need to set a goal instead of just saying you want to do something. You need to plan out how you will get from where you are now to where you want to be:
- Educate yourself on that field/subject
- Determine how much/ if any money it will take to get started
- Determine how long it will take to save up that money
- Research what paths can be taken to help you achieve your dream
2. Create a Budget
Determine how much you will need to pay for necessities such as your mortgage or rent, food and utilites so you know how much money you actually have.
While creating this budget is important, your spending estimates may not be as accurate as you believe them to be. The best way to analyze your spending habits is to track your expenses for a month so you can see exactly where your money is going. When you begin to do this, you may be surprised that a large amount of your money is being spent on purchases that you don’t need to make, such as apps or lunches out. You can then cut these expenses and put that extra money toward your goal.
3. Save Your Money
Put your savings in accounts for retirement or other investments. You can still enjoy time with friends and nights out but weighing the cost of each splurge is important to saving your money. The more you are able to live below your means, the wealthier you can become.
4. …but Pay Off Debt First
Instead of paying the minimum payment due each month, put as much money as you can towards it. When your debt is gone, it will be easier for you to save to reach your goal.
5. Increase Income, Decrease Expenses
You will also want to find ways to raise your pay and lower costs. If you are able to, negotiate a pay raise or lay the groundwork to get a raise the next year as you find ways to lower expenses so you are able to get more money out of your paycheck.
There are various expenses you may be able to negotiate a lower price for such as medical care, credit card interest and cable TV.
- With some doctors and dentists, you may be able to get a discount if you pay in cash when you are at the office.
- You may be able to ask your cardholder to lower your interest rate if you are making payments on time and have a decent credit score. This could be a good time to find out about better deals on credit cards, such as one that pays rewards.
- Ask your cable TV provider for a lower rate and remind them of your other options: switching to another provider or using services such as Netflix or Hulu.
6. Avoid Old Spending Habits
As you build your wealth, be careful not to fall back into your old spending habits. Look past your wants of today to focus on your wealth of tomorrow. Don’t fall into the trap of thinking you have to have everything you want at the exact time you want it.
Begin making your dreams a reality by setting your goals and working towards them now. Save your money, cut costs and enjoy the reward of achieving your goal!