Sometimes it may feel like becoming financially stable is impossible. The bills keep coming and the amount of income coming in doesn’t add up to the money owed. I have watched my parents struggled with money my whole life and can say I have been on both sides of the financial spectrum. I identify those sides as struggling and not struggling. Here are a few tips to becoming financially stable.
10 Ways to Become Financially Stable
1) Track your expenses. Write down/record what you are spending in two week’s time. Take a look at your bills and figure out what you paid on average for the last 6 months. Record your household income. You need to know what you are spending. Yes, saving receipts is a pain in rear end, but knowledge is power. For years we used Mint…and we switched in January to You Need a Budget (YNAB). I tried really hard to like Mint more than YNAB, but I have fallen into love with YNAB. Since we started using it we have come much closer to hitting all of our savings goals.
2) Compare your household income to your expenses. Are you spending more than you make, breaking even, or saving more than you spend each month? You need to know what you are making each month and compare it to what you are spending.
3) Start an Emergency Fund. Tuck $1,000 away in a safe place. Make this goal a priority and try to accomplish it within a few months. Dave Ramsey is a very smart guy, and this is the start of his advice to snowballing debt. The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness is a MUST READ – even if you borrow it from the library.
4) Start paying with CASH! You cannot spend what you do not have. Spending cash makes you think twice because you only have a certain amount of money allotted each week. You have to stretch you money to fit all your needs needs. You may find it easiest to use an envelope or jar system to keep track of your money.
5) Stop the money wasters. Do you really need that coffee on the way to work? Can you pack a lunch from home? Those nickels, dimes, and dollars add up to a big amount when you total them together. Once you have your debt paid off then you can eat out more.
6) Reduce your fees. Cancel credit cards that charge an annual fee. Close any bank accounts that charge you a monthly fee and switch to a credit union. Schedule your bills a week before the due date to avoid any late charges.
7) Ask yourself “Do we really need this?” and cut it/get rid of it if you do not. Think about Redbox or Netflix on a Roku instead of pricey cable/satellite each month. Opt to cut the home phone and go with a cell phone to save money (or vice versa).
8) Shop around. It’s true, you should shop around for rates for services such as automobile insurance, cable, telephone, natural gas, telephone, and cell phone. I was completely dumbfounded when my dad told me he pays $100 a month for his cell phone – and he does NOT get the internet on it. Technology is always changing and it is important to do a little research to make sure you are not putting more money in to one service than you should be.
9) Make a meal plan and stick to it. Use coupons when you shop to reduce the amount you are spending on your grocery bill. Start price matching if your store allows this, that way you can reduce your trips to multiple stores.
Do you have other tips for helping people become financially stable?