Improve Your Finances with 5 Easy Moves

In today’s world, personal finance is a topic on everyone’s mind. But when it comes to improving your financial literacy and health, many struggle with getting started. The good news? Just taking a few small steps can lead to some major changes. 

If you’re growing more aware of your financial situation and wish to make a dramatic change, here’s how you can improve your finances with five easy moves. 

1. Read Books About Personal Finance

When you’re looking to improve your financial literacy, starting anywhere is a great step forward in your journey. 

One of the best resources at your disposal is books about personal finance. Some will focus on providing you actual strategies for money management while others will teach you something like 7 steps to transform to an abundant mindset. 

Just make sure that you read the book reviews offered by other readers to guarantee it offers actionable and knowledgeable advice. The last thing you want to do is purchase a book that doesn’t provide any valuable information to help you improve your finances.

Regardless of what pulls your attention most, seek out prominent authors in the space to learn more about how they’ve achieved their success and what advice they have to offer you. 

With the right guidance, learning how to make healthy money choices during tough times and periods of abundance is more than possible!

2. Plan a Budget

We can’t improve our finances when we don’t have an understanding of how much money we have coming in and how much money we have going out. In order to use our money wisely, we must have a dedicated budget. 

But how do you start? You can create your own budget by:

  • Calculating Your Income: How much money you make dictates your priorities when it comes time to spend it. Calculate your monthly income from your 9-to-5 job as well as any businesses you may operate or side hustles you may pursue. For those in the latter category, income may fluctuate, so you can use estimated income if need be. 
  • Establishing Your Monthly Expenses: There are two types of expenses on your budget: fixed expenses and variable expenses. Start by listing the fixed expenses first, then calculate an average for your expenses that fluctuate monthly. While there may be changes to your budget in the future, having this will set the foundation you need to oversee your spending with ease. 
  • Making Room for Debts, Savings, and Investments: Beyond your expenses (whether necessary or non-essential), you should also incorporate room in your budget for items like debt repayment strategies, saving money in clear banks, and investing. Knowing how much you contribute to each of these categories is crucial to avoid overspending. 

Once you have a budget, you’ll find it’s much easier to stay on top of your finances and begin using your funds more responsibly. 

If you want to take it one step further, you can create a personal financial statement. This is simply a list of your income, expenses, assets and liabilities. 

If you want financial freedom, you need to know where you are right now!

3. Keep Track of Your Expenses

While certain expenses will remain the same over time (such as your rent), others will change depending on a wide variety of factors. For example, while we may anticipate paying a certain amount for utilities, this number will fluctuate based on energy consumption. 

We may also have numerous expenses that we’ve forgotten about over time, such as subscriptions to streaming services we no longer use. It’s important that we’re always on top of expenses to understand where our money is going and cut out items we no longer need. 

You can turn to budgeting apps like Mint to establish your budget, track your expenses and transactions for multiple bank accounts and investment or debt accounts, and receive notifications when there’s anything important to review. 

This way, you don’t have to actively monitor multiple accounts daily to ensure you’re in line with your financial goals. 

4. Automate Your Savings

Remembering to set aside a certain amount of money per week or per month can be difficult. This is especially true if you frequently set reminders to save money but end up forgetting each time you’re supposed to stash it. If something isn’t working, we have to turn to another solution.

Fortunately, we live in a world where almost everything can be automated, and this goes for your savings as well. The bank that you hold a checking and savings account with likely has a feature where you can set a schedule to transfer funds to your savings account. 

Whether you want to save money every week, bi-weekly, or monthly, automating your savings activity gives you the ability to grow your savings without having to worry about doing it manually. 

“You have habits that you’ve built over years, and if you’ve made wise choices, I think there’s a momentum there that, that can help carry you through.”

Garit Boothe

Episode 140: Aim For Progress, Not Perfection. Money You Should Ask

5. Pay Off Credit Card Debts

Credit card debt can be sneaky and cause immense harm to both your finances and your credit score. While emergencies do happen, late payments are typically accompanied by both late fees and high-interest rates.

Should you end up missing a payment or falling into hard financial times, this missed payment continues to grow, building on top of the next missed payment and so on. Of course, this looming debt isn’t just detrimental to your credit and financial health, but your mental health, too.

No matter how much debt you’ve accumulated, the most important thing to focus on is getting this debt cleared. You can also work with a professional to create a debt repayment plan that will help you learn what you need to do to become debt-free. 

When your finances are out of control, it can be easy to feel as though you’ll never be able to fully recover. However, we are far more in control over our finances than we may be led to believe. In the end, it all comes down to the choices you make and the growth you achieve. 

If you’re ready to take your finances into your own hands but don’t know where to begin, the five easy moves listed above will provide you with the push you need to improve your financial health with ease. From here, it’s just a matter of growing and improving your financial literacy!

Author: Garit Boothe

Garit is a personal finance blogger and entrepreneur. He has a passion for helping others achieve financial freedom.