If your finances aren’t where you’d like them to be, you’re not alone! According to recent Gallup data, 51 percent of adults in the U.S. rate their finances negatively in 2020, an increase from 44 percent in 2019. Most wage-earners in the U.S. are dealing with at least some level of financial uncertainty. While fixing your financial situation isn’t something that will happen overnight, these tips can help you gradually get your finances back on track.
1. Gather Data on Your Income and Expenditure
Data-gathering might seem an obvious first step, but a surprising number of people lack accurate and up-to-date information on their take-home pay versus essential recurring expenses. Adding insult to injury, it can be all too easy to lose track of your monthly subscription payments, all of which can add up.
To get your finances back on track, it’s vital to spend some time building a solid baseline of what you’re making versus what you’re spending. Not only will this data give you some useful insights on ways you can cut back your discretionary expenses, but it’ll also give you a good foundation to set a budget, build a financial plan and then stick to it. It’s a good idea to review and revisit this data every quarter.
2. Take Credit (And Credit Cards!) Seriously
Another critical step in revitalizing your financial position is to take a long, hard look at how you use credit cards. It’s all-too-easy to forget that you’re spending real money whenever you use a credit card!
Using credit is an integral part of building up a good credit score. Moreover, it affords you financial flexibility when you most need it. However, be sure you’re aware of how much you owe, the annual percentage rate you’re working with, and any penalties that might apply for late payments.
Credit cards also offer a range of money-saving possibilities. USAA credit cards, for example, can provide a variety of rewards for how you spend — from double points on gas and dining out to cashback rewards for grocery purchases. Find the right credit card, and get it to work for you!
3. Make the Process of Saving Easier
When it comes to tucking money away, success doesn’t just hinge on breaking bad spending habits. It would help if you also built new habits.
The good news is, here you have a range of tools that can make life easier for you. For example, you might consider a micro-transfer tool that analyzes your spending and income to identify a constant stream of opportunities for sending money to your savings account.
4. Choose to Manage Your Risks Proactively
It’s a very human impulse to avoid thinking about unpleasant possibilities, but while no-one should spend every spare minute wondering “what if,” it makes sense to build a healthy approach to risk management into your finances. At the most basic level, this means making sure you’re not under-spending on insurance. Take a careful look at your health insurance, and carefully consider the health challenges you and your family are currently facing.
Another excellent step toward risk management is to amass a small contingency fund for unforeseen circumstances. While a more significant amount is, of course, more useful, even a tiny rainy-day nest egg can be beneficial.
Get Your Finances Back On Track
With so many of life’s challenges, the first step is often the hardest — and the challenge of improving your finances is no exception. Four great ways to begin that journey are to build accurate data on your expenses, review your credit cards, take advantage of services designed to make your life easier, and finally, to manage the unknown proactively. With these strategies in place, you’re already in a much stronger position.