Anyone can find themselves making some financial blunder at some point. Whether it is racking up a mortgage or making a bad investment choice, a lot of us make some major financial mistakes along the way. All's not lost, however, and you may just dig yourself out of that money hole whether you’re an old boot or a young buck. You can improve the state of your personal finances whether you’re in your 20’s, 30’s, 40’s, 50’s, 60’s, or beyond.
The key to financial improvement is developing good financial habits; and, it is almost never too late to start doing so.
Save Up!
There’s really no two ways about this step. You need a nest egg in your old age so you need to accumulate a good sized sum over the years. Hence, the best time to start?…now. The longer you wait to grow that egg, the less you will have.Decide how much of your income you need to set aside after calculating your goal savings. Make a habit of squirrelling this particular sum every payday in a separate account which you assign a strict “Don’t-touch-until-I’m-too-old-to work” rule. You’ll be surprised by how much your savings can grow over the years.
Help your saving habit by:
- availing of an auto transfer of your savings from your payroll account to your designated personal savings account. This way savings becomes automatic, something you don’t actually have to think about.
- scaling back on spending and living frugally. Curb impulse spending. Those absolutely must-haves may not really be necessary. In fact, you don’t actually need that adorable handbag since your other adorables still work your outfit, don’t they?
- Being aware of your [Latte Factor] (http://www.becomingminimalist.com/latte-factor/). The little things you think are too small to put a financial dent do add up to eat into your potential savings. It’s that daily latte from your favourite café. That cup-o’-java can be switched to a home brew to save those extra dollars. Other latte factors can include the magazines you buy, those two dollars-a-pop tracks from iTunes, and the cable subscription you barely even use.
Pay off Debts (There’s No Getting Away from This)
Any debt you have is like a Sword of Damocles hanging over your head. Debts balloon over time especially with an ongoing interest rate on unpaid portions. Formulate an aggressive strategy to pay off any debt, may they be credit card loans or otherwise. One strategy is to list all debts from smallest to the largest. Focus on the smallest, pay it off as soon as you can, and cross it off your list. You’ll feel better after you’ve taken one burden, no matter how light, off your shoulders. Now that you’re on the roll, tackle the next largest one by paying the minimum plus adding an extra. For instance, if the minimum amount due is AU$50.00, adding an extra AU$30.00 for a total payment of AU$80.00 every month would speed up eliminating this debt. Go through the list with same strategy until you’ve paid every cent.Although in most cases it may take years to pay, you just need to keep doggedly on to be able to live a debt free life. Not only is it necessary to pay off loans, a decreasing debt total or ideally, a life of zero debt, is crucial for financial stress relief.
