Popular logic when you are trying to improve your finances is to consider drastic measures to create a noticeable difference but making these major moves is not always the best course of action and a series of small changes can have just as much impact, if not more.
Here are some savvy financial tips to consider and some insights on how you can implement some lasting positive changes to your financial situation. Including a suggestion to take an alternative view on reaching your goals, why you need to analyze your monthly costs, plus some tips that should help you keep more of your cash.
Think small to improve the bigger picture
It’s easy to adopt the mindset that paying an extra $30 or so extra toward your credit card debt payments is hardly worth the bother and won’t really make much of a difference.
It is perfectly understandable that you look at the balance and think how can I clear the debt in one go? But it often pays to take an alternative approach to clearing your debts and adding to your savings pot.
Those seemingly insignificant additional payments actually make a substantial difference to reaching your goals and rather than keep wondering how you are going to raise a chunk of cash in one go, start chipping away at your balances with these small additional sums of money.
It is a good strategy to think small as those extra payments will ultimately get you to where you want to be a lot quicker than if you keep holding back trying to raise enough cash to make what you might consider a meaningful contribution.
When you are committed to clearing debt and putting more toward your savings, don’t try to do it all almost immediately, make regular additional payments when you can and also try to make small changes to your finances to help you free up extra cash.
Where are you overspending?
It is essential that you revisit your budget on a regular basis and review what you are spending your money on to see if you can get a better deal elsewhere or cut out the expense altogether if it is not something you really need or even actually want.
Take a look at all your monthly expenses and do some research such as working out which is the best car to get for your needs and whether you can improve on the deal that you are currently paying.
Pay close attention to every amount that depletes your bank balance each month. Many of us can find magazine subscriptions that you no longer want and gym membership you don’t use anymore can still be going out of your bank every month.
Check your monthly payments regularly and cancel anything you no longer need or use.
Take the cash test
Handing over your credit or charge card doesn’t feel like you are spending real money and this can make you immune to the actual level of your spending, which is probably higher than it would be if you were paying by cash instead.
You will almost certainly discover you are much more cautious when buying your groceries or shopping for clothes with cash, having left your cards at home.
Try taking an amount of cash out of your bank for the week and keep your cards away from temptation when you go shopping. Taking the cash test should see you become much more aware of the value of the money you are spending and it can often help you change your habits for the better.
Keep track of spending
Another good discipline to get into is to write down all the purchases you make.
Seeing what you are spending in black and white in front of you often creates a heightened sense of awareness and is another good trick for reining in your spending.
If you don’t want to write the details down manually there are a number of useful apps that make it easy to track your spending on your smartphone.
If you can introduce a greater awareness of where all your money goes there is a good chance that you will spend less of it on frivolous items, giving you more cash towards your debt repayment and savings goals.
Take a moment to decide
Another useful trick that can improve your finances is to give yourself some breathing space before you commit to a purchase outside of your normal weekly spending.
There are a number of people who tend to buy things on impulse, even including high-value items like cars as well as clothes and gadgets, only to wish they had thought about it before going ahead.
Learn to take a raincheck on those financial decisions. If you still feel you want it after giving yourself some time to think it over, fair enough. But there will definitely be times where that initial excitement fades and you are glad you didn’t rush in to spend the money.
If you try some of the savvy tactics with your money management it could make all the difference to your financial situation.
Nathan Cartwright is an ordinary guy who changed his financial life around 4 years ago. He now shares his tips and money-thoughts online with his articles helping others to take control.