With half the year over it’s time to check in on your finances. Log in to your online banking and take a look at your overall financial situation, how’s it going? Ask yourself the following questions:
- Are my savings where I want them to be?
- Is my debt getting paid off?
- Am I on track to achieve my goals by December 31st?
If the answer is no to any of those questions, then it’s time to make some changes and get financially fit. If you want to live a healthier financial life here are some tips to help you make changes and like what you see when you look at your over financial situation.
Get financially fit with these four tips:
Get money on your mind
If you start thinking about money, you’ll become obsessed with every dollar you spend and your financial life will significantly improve. Just think about saving more and spending less like trying to lose weight. If you’re on a diet you second guess every single thing you put into your mouth – the exact same habit is true for your money.
Lifehack.org says if you want to be rich you have to live below your means. Period. “The wealthy live below their means. The wealthy enjoy luxury and impulse purchases, but never at the expense of the larger financial picture. They live below their means. They know that living beyond their means puts a strain on their finances and moves them away from their financial goals. If you want more stuff, don’t go into debt or spent savings, think like the wealthy think about money so you can make more money and raise your means, so that living within it is more fun.”
Put yourself first every now and then
When’s the last time you did something, went somewhere or bought something just for you? With bills and rent to pay it may have been a while since you put yourself first. Set some money aside for you – around 10 per cent. If you’re always thinking about money you won’t want to spend anything on yourself and that’s not good because once you do get in the mood to spend you’ll probably splurge. Impulse purchases can be a real budget killer.
A much healthier alternative is to budget in part of your after tax income for yourself. If you get the urge to spend it’s there and you don’t have to use credit. If you don’t spend it then it will stay in your savings account and continue earning interest until you do.
Just say no once in a while
If overspending is keeping you from being financially fit, the easiest way to save money is to stay home, but that’s not fun. Instead of cutting out social activities all together you can get financially fit by setting limits. Use the same rules as mentioned above.
You don’t have to become a hermit if you want to save money and you don’t have to always say no to your friends, you just have to say no every once in a while. Skip every third social activity and you’ll watch your savings quickly add up.
Stick to your budget
Is sticking to a budget your money kryptonite? There’s a saying the business world that says “What gets measured gets done.” I think it’s safe to say this rule applies to more things in life than just better business practices. When you set a budget and know where you’re spending money you’re holding yourself accountable for your financial mistakes, management and future – and that’s a good idea.
If you’ve tried to set a budget in the past and can’t stick to it the easiest way to start over is to start with the basics and set spending limits for everything (yes everything) in your life. “Not more than 50% of your take-home pay should go to essential expenses, 15% of your pre-tax income to retirement savings, and 5% of your take-home pay to short-term savings” says Fidelity Investments.
Setting limits is the first step of budgeting, tracking your spending is the second and sticking to it is the third. If you overspend in one category one month, then you need to cut out an expense somewhere else to make sure you stay on budget. This can only happen if you track your spending and hold yourself accountable. No excuses.