It is, of course, easier to dig yourself into financial problems than it is to dig yourself out.
When you’re in a financial hole, it can feel like a lottery win will help you back to normality. But this isn’t really true. While that may be the quickest option, it’s not the only option.
If you can give yourself a period of six months, you’ll find that there are many things — some large, some small — you can do that’ll make your financial situation look a lot rosier. We’ll take a look at some effective methods below. While these approaches won’t necessarily make you rich (though you never know!), they will help to get your finances under control — and help push you towards a sound financial future.
Incomings and Outgoings
To begin, you’ll need to take a look at your incomings and outgoings. It’s easy to get wrapped up in the business of everyday living, and when that happens, our finances can take a back seat. However, if we’re not actively managing our financial situation, then it’s liable to fall into difficulties.
Spending even an hour looking at your incomings and outgoings can make a huge difference. You might just find that you’re in a better (or, regrettably, worse) situation than you previously thought.
Review Your Lifestyle
As we said above: it’s easy to get wrapped in the groove of life. However, it’s always a good idea to get a little perspective from time to time. We tend to just fall into ways of being, such as what we like to do with our friends and family, how much we cook, the daily pleasures we buy ourselves, and so on. If we don’t review our lifestyles from time to time, then later on down the line we might find that we’ve been squandering our money. Moving forward, you’ll know any changes you need to make that’ll have a big impact on your financial situation.
Pay Down Your Debt
There are many people out there who do live within their means now, yet still find themselves in financial troubles. Why? Because they weren’t living within their means in the past. If you have debt, then it’ll be in your interests to focus on paying it off as soon as possible. This is especially the case if you’re paying high interest rates. You could be losing a significant amount of your monthly income to debt, yet it may not even be going down!
There are multiple things you can do if you find yourself in this situation. For example, you could transfer your credit card to a new card, one that offers attractive introductory rates. Tackling your debt won’t just help with your financial situation, either — it’ll also give you plenty of confidence, and give your happiness a real boost.
Invest In Yourself
You have to spend money to make money, is what they say. While there are many ways to do this, one of the best — and one that you can get started within the next few months — is to look at studying on a course that’ll make you more employable.
Most people end their education at the college level (if that), yet they don’t have to. There are many courses that will make you more attractive in the eyes of employers. It’s best to focus on courses that are specifically linked to the industry you work in, but there are more general ones too. If you really want to make yourself more employable, then you could look at studying for a master’s degree — though this will cost a lot more and also take more than six months to complete.
Ask For a Raise
If there’s one thing that everyone should be doing more of, it’s asking their boss for a raise. Virtually everyone just accepts their salary; they think that it was set by a natural force upon which no one has any control. But of course, this isn’t the case. It’s set by your employers, who have their own interests in keeping it on the lower side.
The secret about getting a raise that no-one tells you is that most bosses are open to the idea, if they’re asked. They know that it’s much easier and cost-effective to give a team member a raise than it is to advertise their position and bring in someone new. Of course, there’s a right and wrong way to go about asking for more money, but if you’ve been there a while and you know that you’ve been doing a good job, then look at working up towards asking.
Put Your Money To Work
When we have some additional cash, many of us elect to simply keep it in the bank. While it will, of course, be safe there, it won’t push your finances forward. The only way that can happen is if you put your money to work, which you can do by investing. This isn’t something that you should just jump in to, of course. It takes time to figure out how it all works. To begin, you should invest without using your own money. This will give you an idea of how things work and provide a risk-free space to find your specific investing style. Investing isn’t something you should expect will make you rich, but it can provide a healthy financial future for you and your family if you take a smart approach.
Educate Yourself
It would be useful if they taught things about personal finance in school, but alas, they don’t. But that doesn’t mean that you have to go through life just winging it when it comes to your finances, not at all. There are plenty of resources you can use that’ll help you to learn what you need to learn about finances. There are blogs, podcasts, books, and more available. If you dedicate some time each week to educating yourself about all things money-related, then you’ll find that you learn plenty of useful tips that’ll help you to manage your money a little bit better.
Cut Down On Bills
We all acquire plenty of monthly expenses as we go through life. The issue is that while we’re fast to add them, we’re usually slow to remove them. We sometimes keep monthly bills even long after we’ve stopped getting use from them (for example, having cable tv). One of the best financial moves you can make is to take a look at your monthly expenses, and check that they’re all still needed. It could be that you could save a lot of money just by canceling them.
A Frugal Month
A lot of people don’t like the idea of living frugally for the rest of their lives, and you can see why — life is for living! And sometimes, you’ll just want to splash the cash in order to have a good time. So, OK, living frugally for the rest of your life may not be an option. But what about a frugal month? One of the most effective ways to see your finances increase is to essentially stop spending money on everything other than the essentials for a month. You’ll be amazed at how much you can save. If you can’t commit to a month right now, then start with a couple of weeks, or even one week. You’ll most likely find that you keep it going once you’ve seen just how much money you’ve saved during your period of frugal living.
Work on Your Mistakes
It’s all good and well working hard to get your finances into good shape right now, but you’ll also need to ensure that you’re correcting the mistakes that lead to financial problems in the first place. Most of us have one or two issues that we could work on.
For example, some of us have a problem with impulse buying. If we see something, we buy it. There are things you can do that can improve this aspect of your personality, however! So look at identifying your financial flaws, and then begin the process of moving past them.
What Could Be a Problem?
Finally, remember that it’s not just about creating a healthy financial landscape for now, or for a period of six months or whatever. You’re trying to create a long-term healthy financial landscape.
One thing that’s important to think about is a simple question ‘what could be a problem?’ While you can never predict the future, that doesn’t mean that it should occupy zero percent of your mind. Think of the future, and what issues may pop up that could disrupt your financial health.
One particular area to focus on is to think about your career. It’s not often discussed, but there’s going to be some big changes in the future. The rise of AI and automation could mean that up to 40% of jobs are lost — and they won’t all be low-skilled jobs, either. You can protect yourself by improving your employability now, so that you can continue working no matter what happens.