The parallels between financial diets and plain old regular diets are quite astonishing. In both cases, you have to forgo pleasure in the here and now to get a big payoff in the future. If you can stick it out, you can build an incredible future. If you can’t, you fall into the mire, never to escape.
Turning your finances around is undoubtedly a challenge. You have to find inspiration to say no to your consumer urges. And you have to commit yourself to a period of belt-tightening. But at the end of it, you will arrive at the promised land.
Getting to that happy place, though, isn’t easy. It takes guts – and a rethink of what you value in life. You have to substitute shopping sprees for something else – usually, the satisfaction you get from seeing the numbers in your bank account rise.
So how do you turn your finances around? What can you do to push back against all the debt and breathe the free air?
Splurge Strategically
Taking control of your finances doesn’t necessarily mean spending nothing from now until eternity. That would be self-defeating. If you have a job and create value in the world, you should have the option of spending your way to happiness. But a lot of people fall into the trap of spending to make themselves feel better instead of using money to make their lives better overall.
So, for example, spending $500 on clothes that you’re never going to wear might temporarily boost your mood. But then at the end of the month, you have a massive credit card bill, and you’re no further forward. Now compare that to dumping your money into an educational course that gives you something in return. Clearly, it is a different ball game.
Look For Windfall Opportunities
If you’re living paycheck to paycheck, it can seem impossible to set any money aside. You’re already right up against the limit. You just don’t have the option to save and invest.
If you’re somebody in a situation like that and there really are no opportunities to cut back on expenses, then you need a windfall. Receiving a large sum of money is the catalyst you need to build a lot of wealth – and fast. Once you have money invested, it’ll continue to grow – barring any future pandemics – and balloon into something much larger.
But where can you get a windfall?
Well, if you’ve been involved in an accident, then a personal injury lawyer might be able to tell you whether you have a case or not. Or you can receive an inheritance. Or you can enter a competition. Or you can sell your house, downsize, slash your expenses, and cut back on your bills. There are plenty of ways to do it. Once you have that lump of capital, you’re then free to invest, build your money, and reach for the stars.
Ask Your Friends For Help
Turning your finances around is a challenge, but you can ask your friends for help. Tell them what you want to achieve and get them to help you make it.
Remember, friends are a giant money sink. If you’re going out with them a couple of times a week for entertainment, you could easily be blowing 20 percent of your monthly budget – maybe more. They can do a lot to help you, including suggesting cheaper options when you go out.
Sell Stuff You No Longer Want
How much junk do you have lying around the house? Be honest with yourself: probably a lot.
If you’re not using it, then there’s no need to keep it. It’s not doing anything for you.
It is quite surprising how much money you can make from selling your old junk – stuff you don’t need anymore – especially if you have a lot of it. Local people want electronics, furniture, craft materials, old bicycles – all sorts! Just put it on an auction app and see who’s interested.
Treat Your Savings As An Expense – Because That’s What It Is
Sometimes adjusting your attitude towards savings can help you turn a corner. A lot of people view their savings as a sacrifice – they’re giving up consumption today so that they have something to live on in the future. But people who save as a habit, treat their savings as an expense – something that they need to pay out every month out of necessity.
When you think about it, this approach makes a lot of sense. Savings aren’t really optional at all. You need something to live on when you stop working at retirement. You can’t bungle through on a hope and prayer. There needs to be real cash in the bank.
Try to switch your mindset. See your savings as a salary for your future self. Be brave.
Set Up An Automatic Savings Plan With The Bank
If saving your money manually won’t work for you, then set up a system with your bank to do it automatically. Many institutions will harvest cash from your paycheck before it even hits your account and deposit it into savings elsewhere.
Track Your Expenses
A lot of people who are “bad with money” are often shocked when they find out just how much they spend from month to month. Grabbing a daily coffee can cost well over $100 a month. Taxis can easily top $200. Going out with friends can set you back $500 easily every month. And we haven’t even gotten to all the money you waste on takeout.
You can track your expenses by hand or do it the easy way and use an app linked to your bank account. Look for fees that aren’t adding any significant value to your life over the long-run. Re-consider all your subscriptions and be honest with yourself about whether you’re getting genuine value from them – you’re probably not.
Try not to do everything at once. Take it slow. It isn’t a race. Do one thing at a time. It’ll all add up eventually.
PS Hope this was informational ?!
Stanley
Popular posts on Bag of Cents:
Leave a Reply