“Time is money, money is time”. “A fool and his money are soon parted” … I’m sure there are many others you could quote for me. From purchasing goods or services online to making a stop at your local grocery store, the currency of exchange is money. We pay bills, make sure there is a roof over our heads, food in our cupboards, take care of loved ones whether it be family, friends or pets and to do so there is a constant demand for money.
It’s like life has its hand outstretched towards us in an incessant plead to “pay up “and so sometimes to cover these needs, to enjoy life, we get a little ahead of ourselves and end up with enormous debt. Getting yourself out of debt can be incredibly difficult; especially if you’re in deep and unable to see beyond the sea of debt threatening to drown you. Or, maybe you’re not quite there yet but you do feel as though there’s more you could accomplish if you managed your money better. Well we’re here to help! Here are some tips to get you started.
Create a budget and stick to it:
If you knew that it was going to rain you’d take an umbrella with you right? Well, budgeting works in the same way and helps you to predict your financial weather. Nothing beats preparation. Create a table, list all your projected weekly or monthly expenses (whichever suits you best) to include things like transportation, groceries, utilities, repayments, insurance and any other upcoming payments you are aware of. Then consider the cash you have in hand to cover these expenses.
Ideally, your total cash in hand should not include your savings or your tithes (if that’s your thing). The aim is to ensure your cash in hand also known as your disposable cash, always exceeds your projected expenses by at least 50%. In doing this you’ll be able to cover your expenses and not be forced to leave any unattended. Additionally the extra 50% is there to cushion any unexpected expenses that may arise. Using your savings should always be Plan B and borrowing is the last resort. However, if you do have to borrow; try to keep interest rates at nil by borrowing from a friend or family member and repay your debt at the next opportunity. Where this is not possible try to negotiate for the best rates on your loan from your preferred financial institution.
Track your spending. Having a good idea of what is available and what is not will help you to stick with your budget and ultimately stay within your means. Try to track your expenses every 2-3 months;doing this will give you realistic figures to work with and will help determine how much
money is to be allocated to each category on your budget whether it be savings, entertainment, transportation, groceries, utilities etc. It all sums up to this golden rule “don’t spend what you do not have”.
Use loyalty programs.
Always try to save where possible. Many banks, supermarkets and other service stores have invested in setting up loyalty programs. Upon spending you earn points which accumulate towards sweet rewards and special discounts in store or with affiliate stores and partners. It also helps to be aware of commissioned services that are available to you if you are a government worker, teacher, police, nurse, and so on.
Credit cards have gotten quite a bad reputation over the years but can be a good source of short-term loans. The trick is to make your repayments on time and in full so they stay interest free. Depending on your financial institution there may be perks such as cash back on a yearly basis or travel rewards (my personal favourite). No joke! I have saved over $200 US before just by using the benefits of a credit card loyalty program.
Monetize your skills.
Monetizing your skills increases your available cash. It never hurts to have multiple streams of income. Whether you’re self-employed or working a 9-5 job, having a back-up plan is always a good idea. What area do you have expertise in? What service could you provide and earn a profit from? Can you bake? Are you good at editing, baby-sitting, tutoring, etc. If you have basic computer skills there’s even more profit to earn by setting up an account on virtual assistance sites such as Fiverr and Upwork.
Pay off existing debts on time and in full where possible.
Usually, there are crazy penalties associated with debt and borrowing to recover. If you’re not vigilant in repaying loans, you often end up paying multiple times over on the amounts owed. Make it your mission to avoid unnecessary fees. Sometimes they are minimal but these add up over time. Debt really does weigh on the brain.
Do your health a favor and avoid the stress. Automating your payments also takes the hassle out of repayment (request a standing order from your bank or employers). Do what works for you. Maybe you like lines and free hot beverages in branch… but, hey, the key is to condition your mind towards arranging installment plans; meet with your creditor to discuss what avenue of repayment is best for you i.e. making the necessary arrangements towards repayment. You just never know! You could end up among the lucky few who’ve had their debts forgiven or even reduced.
Save and invest towards the bigger moves
If we are not careful with borrowing in the early years, we may find ourselves falling into the trap. Then having to wait to make the big investment on the big ticket item; such as home ownership or even smaller items such as an annual vacation. Just because we don’t have the money to get started. This is where saving and investing come in. Consistently setting aside an amount towards your goal will help to make that goal turn from a mountain into a hill.
Saving and gaining returns on investment not only reduce the amount you borrow. It will also save you the trouble of borrowing any at all. Imagine that! Retirement is one of the later steps you take in life. That doesn’t mean you shouldn’t get a head start on making preparations. Think about it; you’ll still need to eat, go to the doctor, and cover other critical expenses, so, save now for then. It’s really not one of those things you’d want to put off for too long.
Simple lifestyle changes will help. Turning the lights off to reduce utility expenses, not leaving your tank to overflow, we have to start somewhere. Save where you can so that money can be spent where it’s needed and when it’s needed.
Hopefully the above tips will help get you a step closer to financial freedom. Put them into practice and see. Live your best life. It is possible and it all starts with making these small changes towards the bigger picture. We want to see you succeed, so ease the pressure, you’ve got one life to live and you should live it being financially stable all the days of your life.
Very good read. Now to fully apply.
We are rooting for you Kenneth. Thanks for your feedback.