Do you have enough money? If you’re like most people, you probably don’t think so. That’s okay! There are things you can do to improve your financial situation.
Below, we’ll cover a few tips for improving your finances. First, we’ll talk about earning more. Then, we’ll talk about spending less. After that, we’ll discuss investing. Finally, we’ll cover what to do if your current financial situation is too dire to be aided by these simple tips.
Money in
The most fundamental rule of personal finance is to spend less than you make. But that’s easier said than done, especially if you make very little!
That’s why many of us begin our adult lives by breaking this rule. We spend more than we make, because we’re spending money on college or career training, with the hope that these things will net us higher-paying jobs – which, in the long term, will help us pay down our debts and then emerge into a brighter financial future than we would otherwise have had.
If you’re struggling financially, you should pay close attention to your spending. But you should also consider trying to improve your career and earnings. Think about going back to school or investing in professional training. More training can make you more attractive to employers, of course. And institutions that provide training have an interest in seeing you succeed (they want a good reputation for their business, after all), and so tend to help you in all sorts of other ways. Melbourne Training and Assessment experts RAM Training Services, for instance, offer interview tips, resume templates, cover letter templates, and a private job board. Universities can often connect you with employers, too.
Even if you don’t get more training, remember that your work is your primary path to financial security. Work hard, apply for promotions, and don’t be afraid to keep an eye out for jobs outside of your current employer. A new job can give you a big bump in salary, and a new job offer could prompt your current employer to match the salary offers by the competitor.
Money out
No matter how much you make, of course, you can still spend your way into bankruptcy. Just look at the pro athletes and lottery winners who have managed to do just that! This goes to show that the most important part of the “spend less than you earn” rule is the spending.
So how can you cut spending? You need a budget, of course. Make one as soon as you can. Start by writing down what you earn. Take out taxes (if you’re an employee, withholding probably already covers this). Then take out a chunk to save (do this first to make sure it gets done). Then take out what you need for fundamental expenses: rent, food, utility bills, and so on. Don’t forget about loans and debts. Okay, what’s left? That’s what you have for fun. Don’t spend any more than that.
This is easier said than done, of course, but the very act of making a budget can help us understand how our spending affects our financial security.
Money growing
Your budget included savings, of course – that’s the key to your financial future! Don’t stuff that money under a mattress. Put it in a savings account, where interest will help you avoid major inflation losses. When you have enough to cover emergencies, start investing new savings.
Investing sounds scary, but it’s really not. You can find plenty of good advice in books and online, or you can hire a professional to help you sort out your portfolio. Just make sure to diversify – you want a variety of investments, so that a big problem in one industry doesn’t wipe you out. Balance safer stocks with riskier ones, add some bonds, and consider other types of investments, like gold.
Emergencies
Despite your best efforts, you may someday find yourself in a financial emergency. If you’re buried in debt, fielding constant calls from creditors, or in risk of losing your home, you need one thing: a lawyer. Yes, lawyers cost money – but if you can afford nothing else, then you need to invest in a bankruptcy lawyer.
Your lawyer will help you assess your situation and, if necessary, file for bankruptcy. Though nobody wants to end up in bankruptcy, the process is a valuable tool that you can use to get back on your feet.