It’s easy to say you’ll be much better off financially if you set a budget, save more money, lower your debt and figure out how to make more money. That’s like saying you’ll be in better physical condition if you exercise and eat a healthy diet. In both cases, it’s easier said than done.
There is no silver bullet to improving your financial footing, and it doesn’t happen overnight. It requires a certain mindset and discipline that says, “I want to build a better future for myself and my family, and I’m willing to make the necessary changes to build that future.” Here are eight simple ways to improve your finances in 2014.
1) Set Goals
How will you know if you’ve improved your finances if you don’t set clear goals? Putting concrete goals on paper is much more effective than simply saying, “I want to reduce my credit card debt.” If you want to reduce your debt or save more money for retirement, set firm monthly and yearly goals based on income and expenses. Just make sure your goals are substantial enough to make a difference but realistic enough to attain.
Once you get beyond the basic essentials – housing, food and transportation – it’s really up to each individual to decide how much money should be allocated to things like entertainment, vacations and various forms of investing. Prioritizing will help you control your expenses and focus on what’s most important.
3) Cleanse Your Wallet
How much stuff in your wallet is never used? How much is garbage? Go through all of your credit cards, rewards cards, receipts, coupons, post-it notes, gum, candy and whatever else may have established permanent residence in your wallet. Throw out everything that’s outdated or useless. A lightweight, streamlined wallet often leads to a clearer mind and better purchasing decisions.
4) Walk Away from Impulse Purchases
Those marketing and merchandising people are a sneaky bunch. They know how to put the products we all want but don’t necessarily need right where we tend to look, whether they’re in a store, on a website or social media page, or in our inbox. Look away. Count to 10. Pinch yourself. Whatever you do, don’t give in to that impulse to buy.
5) Avoid Temptation
Catalogs, email subscriptions and pages that you’ve “liked” on Facebook are constantly throwing tempting offers in your face. But you asked for it, didn’t you? It’s the equivalent of sleeping next to a box of doughnuts when you’re on a diet. Once you’ve completed your holiday shopping, do some unsubscribing and “unliking.” Removing temptation reduces the likelihood of frivolous purchases.
6) Evaluate your Major Purchases
What purchases delivered the best value, and what purchases turned out to be clunkers? What did you do right? Where did you go wrong? What questions should you have asked a salesperson that you didn’t? Learn from your successes and failures to become a smarter, more prepared shopper. This will not only help you spend more wisely, but also eliminate a lot of frustration and headaches.
7) Invest in Quality
It’s natural to gravitate to the cheapest option, regardless of your level of income, but the cheapest option often ends up costing more money. Investigate products beyond the price tag and name brand. Read customer reviews. Ask a lot of questions. Find out why a certain product costs more than another. If there is no good reason for a higher price, it may make sense to go with the cheaper product. However, don’t ignore obvious shortcomings to save a few dollars upfront. An investment in high quality now is likely to save you money down the road.
8) Maintain What You Have
Most cars, appliances, heating and cooling systems, power tools, lawn mowers, furniture and even games and toys will last longer than you expect with regular maintenance and proper care. Invest in quality first and take steps to maintain that quality and protect your investment.
How do you plan to improve your finances in 2014?
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