According to various studies, “the US is on the verge of a ‘cost of living’ crisis due to rapid inflation”, with the prices of everything from groceries to fuel increasing steadily each month. As a result, it’s hardly surprising that 77% of adults in the US are worried about their finances. This is no longer a debate about whether or not people are spending too much money on Netflix subscriptions and dining out, as many are finding it hard to buy basic groceries or fund their transport to and from work.
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Thankfully, there are various steps you can take today to begin to better your financial situation. For example, you could:
Get serious about budgeting.
Budgeting is a great way to ensure that you are making more of your money, as it reduces overspending and helps you prioritize your purchases. If you’ve never budgeted before however, start simple by following the 50:30:20 method. This guidance encourages you to:
- Spend 50% of your income on your needs. (Rent, mortgage payments, groceries, medication, insurance, transport)
- Spend 30% of your income on your wants. (Entertainment, subscriptions, days out)
- Spend 20% on savings and debt repayment.
If you find it hard to stay on track, you may want to download a free budgeting app onto your phone. You can input all of your goals and targets into the app, which will then send you regular notifications that keep you within your budget and warn you when you may be about to overspend.
Find ways to pay less for what you need.
In some cases, improving your financial situation revolved around ensuring you aren’t overspending. For example, you could use price comparison websites to see whether you could get cheaper insurance, or utilities elsewhere, before making a switch. If you’ve taken out a loan, such as a car loan, you should also ensure that you’ve got the lowest possible interest rate. This will make the repayment process much easier (and kinder to your bank account). You can click here to find out how you could get a lower interest rate on a car loan.
Embrace money-saving tech.
There are plenty of apps you can download (or websites you can visit) that will help you save money when shopping. For example, there are hundreds of cashback websites out there, which will provide you with financial rewards on a wide array of purchases. Alternatively, you could use digital coupons before checking out, to ensure that you’re always getting the best possible deal. As a result, downloading these apps is a great way to save money without even trying.
Diversify your income.
When improving your financial situation, you may also want to look out for ways in which you could increase your incoming finances, such as by diversifying your income. For example, there are many hobbies that translate into profitable side-hustles if you’re willing to put the work in. This way, you have a variety of income streams to rely on as opposed to only one – which could bode well should the worst happen and you lose your job or your salary drops.
Don’t be afraid to ask for a raise.
Asking for a pay raise may sound daunting (with one in ten workers claiming they’re too scared to ask), but it is a great way to improve your financial situation and ensure that you are being compensated fairly for your time, efforts and expertise. Of course, you must go about this process the right way. First, put together a list of reasons why you feel as though you are deserving of a raise. For example, you could refer to targets you have met and client feedback. You should then do some research to figure out what the average salary is for your position, and ensure that this is being met. Then speak to your boss to request a meeting to discuss it further. During the meeting, be confident in your abilities and know your worth, using this to leverage a pay raise.
Tackle loans and debt.
Whether you’re paying off student loans or other forms of debt, working on reducing the amount of money you have to repay is essential when it comes to improving your financial health. After all, it brings you one step closer to being debt-free. However, it’s equally important that you approach these repayments in the right way. For example, you should focus on paying off the loans with the highest interest rate first. You should also make sure that you are not paying back more than you could feasibly afford to. In some cases, it may also be useful to look into debt consolidation loans, which makes it a little easier to manage
Reduce your utility bills.
Utility bills can quickly get expensive, but there are some ways in which you can go about lowering them. For example, when you switch to a green energy supplier, your home is more energy-efficient. This means that your monthly bills will drop considerably, even if you originally have to pay an installation fee. Additionally, if you find a company that provides you with a better deal than your current supplier, let your current supplier know. In many cases, this will result in them offering you a better deal to retain your custom. If not, then you can then switch to the cheaper provider and will still be paying less out of pocket overall.
Consider investing.
If you have a little money set aside each month, investing can be a great way to reap long-term financial rewards. However, you should only invest in companies or brands that are reputable, to protect yourself from falling victim to investment scams. A general rule of thumb to follow during this time is that if something seems too good to be true – it probably is. If you’re still unsure, you can read reviews of certain companies online. You should also ensure that you do not invest more than you can lose, as otherwise, you could be putting your entire financial future at risk.
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