Are you tired of having no money, stuck in debt and overwhelmed by even the thought of creating a budget? Are you looking for ways to transform your finances?
O.M.G that just gave me heart palpitations…. Anyways, the financial struggles that we all deal with on a daily basis can be completely overwhelming! The thing is they don’t have to be. There are many powerful ways to transform your finances. To help get you started I’ve compiled a list of 6 Powerful Ways to Transform Your Finances Immediately.
Feeling like you are struggling each month to make ends meet and like there is a never ending array of debt collectors calling you can be draining. Or maybe that’s not you. Maybe you are the person who just feels like no matter what you try to do, you are just spending too much money and there never seems to be enough even though you do manage to pay your monthly bills. There has to be a better way to live…. AND there is a better way to live.
If we would all learn how to control our finances and take control of them we could all live a fuller life. There is nothing better than knowing that you no longer are enveloped in consumer debt. Literally, it feels like a ginormous weight is lifted off of you and you can breathe better. Life suddenly isn’t so daunting and you have a better outlook on life. This is what living debt free can feel like. Take control of your life and finances today with these 6 Powerful Ways to Transform Your Finances Immediately.
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6 Powerful Ways to Transform Your Finances Immediately
1. Set a Real Workable Budget
Setting a real workable budget is the first step in taking charge of and transforming your finances. If you are not sure how to budget it’s actually pretty simple. Don’t stress over the word budget or look at it as restrictive. Start to think positively about budgeting and that alone can help your mindset. You need to take control.
Gather all pay stubs, bank statements and monthly bills for the last 3 months. If you have quarterly bills gather those as well. Divide your spending into different categories and see how much you are spending in each category. For example: Rent/Mortgage, Utilities ( Water, Gas, Sewage, Garbage, Electric ), Car Insurance, Car Payments, Loan Payments, Child Care, Groceries, Flex Spending, Ect. You will then need to add up how much you have taken home over the last 3 months. The reason you want to use the last 3 months of income and bills is because you are able to get an average for that time. Generally speaking that average gives a better picture of your actual finances.
If you find you are spending more than you are making, then that’s a clear sign you need to get your spending under control! Look at where you are spending and cut back in areas that are more flexible such as groceries. Look into refinancing loans for lower interest, shop around for cheaper insurance, ect. If you find that you are not spending as much as you take home, look into saving more money each month and start paying off debt!
2. Get Family and Loved Ones Involved
Get all family members and any loved ones that you feel are important involved in the budgeting process. Allowing them to be involved does wonders for your finances! Not only does this help them feel needed and like they have a say but truly makes them a part of the financial process. Being involved in the financial process also helps to hold each person accountable for their spending and maybe even your spending.
If your family and loved ones are all on the same page everyone knows what they can and can’t spend. This will also help when you or another family tries to deviate from the budget, because the other person can help stop that poor bad decision.
Turn budgeting and saving into a good thing instead of being looked at as restrictive. You may even want to turn it into a game or a challenge. See who can save the most in the shortest amount of time. Or see who can figure out how to save the most on groceries. Maybe give each member of the family authority over certain parts of the budget.
For example I am better at saving money on groceries, finding coupons, money saving apps and sales trends. So I might be assigned to groceries. My husband is better at finding lower interest rates and thinking about what steps we need to take to achieve the next goal. So I would assign him the duties to look at how we can save more money on car insurance, mortgage interest, auto loan and student loan interest.
Every families needs are different and every family member has different strengths and weaknesses. See what works best for your family.
3. Make Smarter Purchases
Pretty much on any given day we spend money in some sort of way. Those purchases or expenses can be a simple indulgence such as a coffee or pastry, maybe a quick stop at the grocery store, gas, paying your bills or maybe even some sort of online purchase. The point is if we are spending money, we need to learn to make smarter purchases BEFORE spending that money. You can do that by deciding if that purchase is absolutely necessary.
What I recommend and have spoken about countless times is to do a self-evaluation before completing your purchase. Some of the questions in that self-evaluation you should be asking yourself include:
- Can I find this cheaper elsewhere?
- Is this a real need or a want?
- Can we get by without this item? Maybe find a more affordable alternative or not complete the purchase at all?
- Could I borrow or rent this item for less?
- Could I find this item for free or drastically reduced on sites like Craigslist, Offer Up, Ebay, Facebook yard sales or any other local free site?
This may seem like a lot to ask yourself when you are first starting to put this process into play. Stick to it and you will see that it does work. Keep in mind that you need to re-train yourself to start making better financial decisions. In time these questions will automatically come to mind and you will start to make better decisions.
Some individuals even recommend that at the end of your shopping trip, re-evaluate what you have in your cart and take out at a minimum 3 items.
4. Cut Back on Utilities
Cutting back on utilities is one of the easiest ways to save money and transform your finances! If you pay out monthly to cable, phone, internet, gas, water, garbage, sewer and electric companies chances are you might be able to save some money. All you have to do is pick up the phone and call and ask for either a discount or if they are running any specials where you might be able to save money monthly.
Companies such as FPL ( Florida Power & Light ) have some great programs that not everyone may be aware of. One program that my family is signed up for is the On-Call program. Essentially what happens is that someone comes out to your home and places a device on your water heater, A/C unit and your pool equipment. By placing those devices on your equipment you are giving them permission to limit your use of those items in the event of a storm or power outages. For permitting that you will receive a monthly discount on your electric bill ALL YEAR LONG!
Check with your local companies to see what programs they have to offer. No company wants to lose your business, so many of them may offer you some sort of promotion or discount to continue receiving the services they provide.
If you have any debt that may have interest attached to it, you should see if re-financing to a lower interest will help you reduce those monthly payments. Some companies will offer reduced interest rates if you opt for automatic payments. Personally I have taken advantage of this offer with my student loan company as well as my mortgage company.
Quote out any insurance policies you may have. Those may include renters, home owners, car insurance, medical insurance, as well as life insurances.
5. Set Goals for Savings
Decide how much you want to start saving each month and what that savings will be used towards. You need to establish these savings goals to have a clear picture of what you are trying to achieve and in what time period.
Let’s say that you want to start your emergency fund of $1,000.00. Decide how long it will take you and what you will do to satisfy that goal. If your goal is to save towards a $1,000.00 emergency fund and you want to complete the goal in 3 months, then will you save $84 a week or make it $333.34 monthly. Will you take it from your flex spending or cut down your grocery spending? These are goals that need to be thought out. The reason you want to clearly define your goal is that it takes a large goal and breaks it into bite sized pieces that make it easier to achieve.
Check to see what savings or CD growth rates are locally as well as with online banks. Some online banks are Ally, Capital One 360 and PNC. A great website that can compare savings rates side by side is BankRate.com.
6. Get Ready to Handle Tough & Overwhelming Situations
Money is the number one topic that nobody really likes to talk about. Talking about money especially with others can become extremely uncomfortable, tough and overwhelming to say the least! Be prepared!
No matter how frustrating these conversations may be, they need to take place. In order to be successful at budgeting and savings the entire family needs to be on board. You all want to save money and start to transform your finances, so talk about what you want to control and make change happen! You may not like what the other person has to say but you all need to listen with an open mind to each other. Just remember that you are a family and are all trying to work towards the same goals. Devise a plan to handle these situations so that there is no yelling, screaming, crying and throwing the budget out the window.
There may even be times that you might not be able to make minimum payments on utilities, credit cards or purchase food. Again, be prepared. How are you going to handle this situation?
HANDLE THE SITUATION
Are you going to cut back on grocery spending that month to make those minimums? Will you go another week without your manicure or hair cut? Are you willing to apply for financial assistance if needed? Food stamps, WIC and free or reduced lunches are great options if your family is in need. Don’t be ashamed if you need the help, remember this is only temporary!
There were plenty of times when my husband and I were down and out financially that we had to make these decisions. When we were in our payoff debt mode and not making much income these were serious conversations that we made. We made a pact that none of our bills would be late and we made sure that didn’t happen. Late charges can really add up! we were trying to rebuild our credit and pay off debt, not add more. There were plenty of times that we had to go to local food banks to have food to eat, contact the local salvation army for baby supplies. Do what you can to make it work.
I understand the struggle is real! I’ve been thru it, we’ve been thru it! Believe me you can do this!
These 6 Powerful ways to transform your finances immediately do and can work for you or anyone. I covered 6 major debt transformation categories, however within each category there are way more ideas of how to break it down. Let’s get to the nitty gritty of your debt, create a solution and make your budget work and see an incredible transformation in your finances. Transform your finances immediately!!