Does the state of your finances keep you awake at night? If it’s any consolation, you’re not alone. The average American worker is only a job loss or illness away from financial trouble, considering that 80 percent of these workers live paycheck to paycheck. Things aren’t any better in the savings department. The average American has about $5,000 in a savings account. This is barely enough to solve most financial emergencies. We all want to be in a spot where we don’t have to worry about financial uncertainties. So, how can you improve your financial well-being? In this article, we’re sharing a couple of effective tips you can use to improve your finances.
Living Within Your Means
Every adult knows that living within their means is the right thing to do, but are you really living within your means?
If you’re anything like most people, you’re probably stretching your finances. Perhaps you live in a house that’s unnecessarily expensive (as a side note, you rent should be no more than 30 percent of your income). Or you spend more on luxuries such as movie tickets, road trips, eat-outs, and whatnot.
You don’t have to spend your entire paycheck before the next one comes in to be a person who doesn’t live within their means. If you’re barely getting through the month on your paycheck or never have anything substantial left to save, it’s clear you’re not living within your means. Draw a budget and stick to it. Do away with unnecessary expenses and get cheaper housing if you have to.
Find Ways to Increase Your Income
If you’re living paycheck to paycheck, there are two to solve that problem. Significantly reduce your expenses so you’re saving more, or increase your income. Although increasing one’s income is easier said than done, it’s doable. An easier path is to take up a second or even third job, as long as you’ve got the skills and grit to handle them all. However, the best way to increase your income is to start investing. If you’ve already got a substantial amount of money in savings, you can use it as investment capital. You could invest in the stock market, precious metals, or real estate. Because investing involves taking risks, it’s essential to consult an investment advisor for expert advice.
Be Smart with Debt
Loans are part and parcel of the average American’s life. Right after high school, you certainly took out a student loan to fund your college education. If you were lucky enough to avoid student loans, then sooner or later you’ll find yourself needing a credit card, auto loan, personal loan, or even a mortgage. Loans are a handy financial tool, but they can also ruin your financial life. Be smart with debt and always consider your consolidation loan options when you become overwhelmed. Specifically speaking, there are ways to consolidate and refinance private student loans. They don’t have to ruin your life. You just have to consider what your best option is!
Start Improving Your Financial Wellbeing
As soon as you become an adult, your journey toward financial freedom begins. It’s a destination that you can only reach if you continually work on improving your financial wellbeing.
Be sure to practice the tips fleshed out above, and keep reading our blog for more handy tips and insights.