Nearly all people desire financial freedom and security. Reaching these ideals allows you to live comfortably, eat well, feel safe, be healthy, learn more, and see the world. Unfortunately, many people think they will never achieve financial freedom or security. Recovering from poor financial choices can make this especially difficult. Trying to save when living month to month and coping with disasters and tragedies are other factors that can contribute to financial stress. It is important to implement a few important strategies when on a path toward financial confidence. By following these key tips, you can gain confidence in the topic of finances and save money.
1. Take a look at your finances, especially monthly and yearly recurring bills.
Are you spending too much on streaming services? It may be time to cut back to just one or two. Are you spending too much on insurance? It is wise to get home insurance or a car insurance quote and safeguard yourself in case of emergencies. There are apps that can help you track monthly spending in areas like these. It is important to use a free app to avoid adding just one more monthly expense to your list of bills.
2. Pay off the credit card, student loan, and other interest accruing debt.
Interest makes debt issues worse and worse over time. Setting up a regular payment plan can avoid those debts costing you even more over time. Settlements are often available, depending on the type of debt you have. There is no such thing as a debt that is too large to be worth starting to pay off. Likewise, there is no such thing as a debt that is too small to be worth paying off.
3. Find side hustles and sources of passive income.
Side hustles can often be done at home or in your free time. Different side hustles that may help bring in income include babysitting, driving for rideshare apps, delivering food, cleaning, selling art, freelance writing, reselling items, or pedalling desserts. Passive income can also be earned in a variety of ways.
Some of these ways to create passive income include affiliate marketing, bank account interest, selling e-books, playing the stock market, and manipulating cryptocurrency. Side hustles are often more immediately lucrative than passive income opportunities, but both are important and helpful for those looking for financial stability.
4. Do a savings challenge, use saving apps, or find other ways to increase your savings.
Generally, it is considered a good rule of thumb to save at least ten per cent of your income and to have at least three to four full months of expenses in savings at any given time. To reach additional savings goals, there are a variety of tools available. Savings challenges can be used no matter how large or small your goal is.
By printing your challenge and hanging it on the wall, you will have a strong visual reminder of your goal. There are also a variety of apps that help you save money, including apps that round up every purchase to contribute to savings accounts.
5. Live within your means.
Keeping up with the neighbours is far less important than having financial freedom. Often, over-hyped status symbol items like cars, watches, and designer clothing are not worth the cost at all. Making a flashy purchase that you do not need will hinder your financial growth, especially if you finance the purchase.
If you are considering a large luxury purchase, make sure to take some time to consider how necessary the item is. If you still feel like it is a good idea after a month or two, start slowly saving for the purchase without limiting your other savings accounts.
6. Find creative ways to replace unnecessary spending habits.
For example, it may be less expensive and more delicious to make your daily smoothie or coffee beverage at home. You might find online groups and pages that list free items in your local area. Furniture and decor items from these pages will often be unique and high quality than something found in the store.
You can also try to upcycle and DIY clothing to match new trends. Trends that are easy and creative to copy at home include tie-dye, crop tops, and ripped jeans. Food, clothing, and entertainment are all important, but when costs can be reduced without sacrificing pleasure, they are even better.
7. Work with a financial advisor or financial planner.
These services can be useful at any income level or on any budget, but they are handy for business owners and those who make slightly higher amounts of income. These professionals can provide a full analysis of your finances and recommend any needed changes.