Learning great money management skills is a great way to improve your overall lifestyle. A few small changes can make huge differences when it comes to money management. There are several ways you can improve your finances. Below are some great tips to help get you on the road to success.
Setting Financial Goals
Think about what you want to achieve financially throughout the year. If you are trying to become debt-free start by determining how much total debt you are in. Make sure you are specific in your goals and remember to set timelines. To avoid becoming overwhelmed, begin with your smallest debt first and make bigger payments to clear that debt off. Once that debt is cleared, start on the next smallest debt and so on. When you see your achievements it will give you much more incentive to continue on. By following this guideline, eventually, you will attain your goal of becoming debt-free.
Reducing Monthly Output
You can save a lot of money per month by making a few simple changes. Some of these changes can be:
- Cooking at home as opposed to ordering food in
- Making your own lunch instead of buying it
- Carpooling to work
- Cutting utility bills
- Quit smoking
- Reduce banking fees
- Use cashback apps
- Use the Flipp app for price matching
- Sell items you no longer use on buy and sell sites
You would be amazed at how much money you could actually save by making some of these changes.
Making a Budget
It’s one thing to create a budget, it’s another to follow it through. Creating a budget allows you to know how much money is coming in and what has to be paid out. There are free and paid apps available to assist you in creating your budget. Some of these are:
- Mint (U.S. and Canada) – Free App
- KOHO (Canada) – Free App
- YNAB – Paid App
After all your bills are paid at the end of the month, determine what is leftover and how you can effectively use it to pay down your debt. If there is not enough left over, you will have to work on ways to increase your income.
Pay Yourself Every Month
A great way to establish savings is to always pay yourself every month. It doesn’t have to be a lot, perhaps $50 every month goes into a separate savings account and as long as you don’t touch it, it will build. At the end of the year, you will have an extra $600. The more you put aside, the more you will have at the end of the year. The best way to do this is having it automatically transferred to your savings account on your paydays.
Ways to Increase Your Monthly Income
There are several ways to increase your monthly income depending on how driven you are. Some ways to effectively increase your monthly income are:
- Start a Blog
- Become a Proofreader from home
- Provide dog walking or pet sitting services
- Rent out a room in your home
- Sell Your Services by freelancing
- Many of these are work from home jobs that can greatly increase your monthly and annual income.
Other Ways to Attain Financial Freedom
There are many other ways you can make simple changes to improve your finances. Some of these are:
- Make lumpsum payments on your mortgage every year
- Hold yard sales to sell items you no longer use
- Start an investment account
- Maximize your contributions to tax-free accounts such as RRSP’s
A few simple changes and self-discipline can put you on the road to financial freedom.
Keeping That Financial Freedom
The important thing to remember is that you have to account for your finances. It means keeping your taxes up to date and taking advantage of all your tax breaks. Here at TorontoAccountant.ca we can help you with that. Just give us a call at 416-398-1700 so we can arrange a time to deal with your taxes.
