Taking a close look at your finances may not be the most fun you can have on a lazy Saturday afternoon. However, if financial stresses are getting you down, taking the time to analyze your spending and saving habits may just yield some lasting dividends. But where do you start?
These three often-overlooked and surprisingly easy finance hacks can improve your money outlook in the space of one studiously-spent afternoon.
Start Working With Known Quantities
One of the most common causes of financial stress is a simple lack of awareness about income and expenses. The classic tool you can use to fix this is — yep, you guessed it — a good old-fashioned budget.
Usually set monthly, budgeting is a process of establishing your income as a baseline, and then methodically listing out your expenses, broken down by category.
Typically, all those necessary outgoings like your mortgage, grocery, and utility expenses will sit right up top as fixed “must-pay” items.
Then, you can start listing out conveniences, followed finally by luxuries.
The obvious benefit here is that you’re gathering useful data about your financial situation and putting it to good use.
It side-steps one of the most common reasons people get into financial data: simple lack of awareness about where your money is going.
If budgeting is your Everest, consider using a budgeting app to smooth the process along.
Or if you prefer a more basic solution, the Federal Trade Commission website offers this bare-bones but handy budgeting worksheet.
Print it off, join the financial dots, and you have a good beginning.
Get Smart About Credit Cards
The next step is to take a fresh look at your credit card usage — in particular, honing in on whether you have the right card, and how effectively you use it. Let’s look at finding the right card first.
Not all credit cards are created equally.
There are annual fees to consider, but it’s also worth taking a look at the fine print for penalty clauses.
Some cards will impose a wide range of penalties for slow repayments, while other products will offer much greater flexibility.
Take a look at rewards as well, and find a card that matches your lifestyle.
For example, some USAA credit cards offer double points on gas and dining out, while the company gears other credit cards toward grocery shopping or military-base purchases. Find a card that fits with your life.
Take Willpower Out of the Equation
Good financial habits are a bit like good eating habits.
It’s all smooth sailing until the moment you’re hungry and see that big slice of chocolate cake lurking at the back of the fridge.
Saving is the same way. Opting to move a chunk of your disposable income every paycheck to a savings account can challenge anyone’s resolve.
So why not take willpower out of the equation, and use a savings tool or a recurring transfer option?
A savings tool can automatically analyze your checking account to identify opportunities for micro-transfers of as little as a dollar to your savings account.
These small and pain-free transfers can add up in the long run.
Alternatively, using a recurring transfer tool, you can decide how much you’ll automatically transfer to your savings, and adjust the amount as your financial situation changes.
The great thing about either of these approaches is that you can set it and forget it. Behind the scenes — and with no extra willpower required on your part! — your nest-egg slowly grows.
Not Bad For an Afternoon’s Work!
A bit of research and planning may make a world of difference to your finances, and these three simple hacks are a great place to begin.