The truth is, many of us aren’t as good with our finances as we think. Too many people live pay cheque to pay cheque, with very little buffer in case of emergencies. Others spend without thinking, not knowing where their money goes each month. Both of these situations are inefficient ways of handling your money, which can result in low savings, financial stress and more. By implementing a few small changes in 2019, you can transform your finances and achieve financial goals like never before. Here are 3 ways to dramatically improve your finances for this year:
1. Get Educated
Most of us do not have enough financial education and mirror what our parents did, or whatever we were influenced by as children. This can be dangerous, especially if those around you don’t have the best financial habits. Investing in some education can help ensure you understand how to manage not only your personal finances, but finances for a business. If this feels overwhelming to you, you have two options here: you can study a course about personal finances or you can hire a personal financial advisor. They’ll be someone who’s done the hard yards of education, has tons of experience and can help guide you to make better decisions for you and your family. Many people who suffer through tough financial times and work with a financial advisor, actually realise the value they provide and want to offer this life transforming service to others. simplyacademy.com offers some great, affordable courses that you can enrol in if you’d like to become an expert!
2. Track Your Spending
It’s commonly known that what you don’t measure, you can’t track. By tracking your spending you may be surprised to learn exactly where all your money is going – many of the locations you’ll expect, such as rent and transport costs, but you may be surprised to find you’re spending outside your budget on coffee, eating out, or other things that you can possibly reduce to save money and to transform your savings. Tracking your spending can feel overwhelming in the beginning, but there are plenty of great phone apps that can help you almost automate this process!
3. Have an Emergency Fund
An emergency fund is a set amount of money you put to the side and don’t touch unless there’s an emergency. There are so many unforeseen things that can happen in life, such as an injury, job loss or even a family death where you want to travel last minute at a considerable expense. Without a financial cushion, these life effects can be extremely stressful and cause financial ruin, but with an emergency fund you have money set aside for these things that you can use to help get you back on your feet. Deciding how big to make your emergency fund will depend on how much you can save and how much your expenses are. I suggest starting at one month’s of expenses as a savings goal, once you’ve reached that move onto 3 months and 6 months. The peace of mind an emergency fund will offer you is absolutely priceless!
Using these three tips you can quickly transform your finances in 2019. If you have any other suggestions of how you can transform your finances, please let me know in the comments below!