Want to Earn Some Extra Money?
- Survey Junkie: Earn up to $50 per survey with one of the highest-paying survey sites on the web. Join Survey Junkie Now
- Swagbucks: Make money watching videos, taking surveys, shopping online and more. Join Swagbucks Now & Get a $5 Bonus
- YouGov: Get paid to share your opinion by completing surveys and earn up to $50 in cash or gift cards per survey. Join YouGov Now For a $2 Sign-up Bonus
- MobileXpression: Earn free money (passive income) just by leaving an app installed on your phone. Join MobileXpression Now & Get a Free Gift Card in One Week
A year from today will you be richer than you are now?
You can be, if you make it a habit to do some financial homework every Sunday afternoon.
Of course, any other day of the week will work too, but it helps to be consistent.
Pick a day when you regularly have free time, and commit to spending an hour or two seriously working on your personal finances every week.
You might spend your first couple hours planning out your future weekly finance sessions.
What should you do with the time? Use the ten steps below to dramatically change your financial situation in a year or less, and to set you up for even greater long-term success.
Ideally you’ll want to work on all ten of these, but as long as you do something with a few of them, and do the work each and every week, you’re sure to make progress.
And the steps suggested below are certainly not the end. You know better than anyone else where your financial life needs the most work, so add to this list and get busy. To get started, you might want to…
1. Deal With Your Debts
One report says the average credit card debt per person is around $3,100, but that includes all adult individuals. If we look only at people who have credit card debt (many of us have none), the average household credit card debt is closer to $16,000.
Whatever you owe on your credit cards, it’s too much.
There is rarely a good reason to carry a balance.
Not only is it a burden, but it also means you pay more for things, because the ease of taking on the debt means spending more, and, of course, because of the interest charges.
So on one of your Sunday afternoons, take a serious look at your credit card debts and create a plan to eliminate them.
See my article, “15 Ways To Quickly Pay Off Credit Card Debt” to get going, and use as many of your “finance sessions” as necessary to implement the suggestions there.
2. Cut Your Expenses
Making more money is nice (and we’ll get to that), but the easiest way to quickly improve your financial situation is to cut expenses.
Imagine finding a way to continue the lifestyle you’re used to, but spending $200 per month less to do so. By itself that will put you $2,400 further ahead in a year’s time.
You can devote at least several of your finance sessions to this goal.
A good place to start is to create a daily tracking form where you register every single expense, including the big stuff but also every cup of coffee or parking meter quarter.
After a month or two of doing this you’ll see pretty clearly where your money is going (expect to be surprised), and where you can make adjustments.
Where do you make the cuts? First find ways to reduce large regular expenses, like utilities, insurance, and car payments (sell and buy used for cash?).
Then, with your tracking information in hand, reduce expenses for things you really don’t value (do you need cable, or is streaming Netflix enough?).
Finally, look at every category of expenditures and see if you can find a way to get the same things for less.
3. Start Saving Your Money
How much you save and invest for the future is up to you.
Saving 10% of your pre-tax income is considered the minimum for a safe retirement, but anything is better than nothing, and the sooner you start the better, so make retirement planning (or a review of your current plan) one of your first Sunday sessions.
Of course, even saving 20% of your income won’t automatically set you up for retirement. You have to do something with those savings, which brings us to our next two strategies…
4. Get Better Bank Accounts
Even during the low-interest years we’ve been through recently, there have been savings and checking accounts around that pay up to 5% annual interest.
These ultra-high-interest accounts are limited, and come with a few catches, but they may be worth your time.
If those accounts are too much trouble, you can at least move your savings into something easy that pays over 2% annually. A good list of high-yield bank accounts will have numerous options to choose from.
Naturally you should move to accounts that have no fees or have fees that are easily avoided. And once you have that set up and the cash starts to accumulate, start moving some of that money into true investments.
5. Start Investing For The Future
CNBC says saving and investing $5 per day can make you a millionaire if you start young enough, and if you get a 10% return in the stock market.
That’s the average return for the S&P index since 1926. Of course, you may not achieve that, but even at a more modest 6.5% return they say you’ll have “$168,000 in 30 years and $667,000 in 50 years.”
Once you have enough money in your nest egg, you might try more hands-on investing, like fixing up and flipping a house, to make even bigger returns.
In any case, you’ll do well to save and invest just about any amount regularly. So spend a few of your Sundays setting up your investments and making the necessary modifications as needed.
6. Use Reward Credit Cards Properly
For years I made thousands of dollars annually with credit cards, from bonuses and cash back, and from credit card arbitrage. I detail some of my strategies in my article, “17 Ways to Make or Save Money With Credit Cards.”
But even if you don’t enjoy the “financial games” like I do, you can at least make some modest changes to how you use credit cards.
For example, if you have a card that pays 3% cash back at grocery stores, label it and use only that card when buying groceries. If another pays 5% cash back on rotating quarterly categories, label it each new quarter and use it appropriately.
Let’s say that, instead of a lousy 1% cash back, you can average even 2.5% back on $10,000 in annual purchases.That’s an extra $150 in your pocket — not a lot by itself, but it all adds up, and the extra effort should be minimal once you have your “system” in place.
7. Sell Things You Don’t Need
Selling your unused stuff may sound like a weak strategy, since it appears to only bring in a bit of cash one time, but sometimes there is a synergy between strategies that makes them more powerful than they appear.
For example, if you sell a boat that you never really use for $2,000, you don’t just collect cash one time. You also eliminate the ongoing expense of insurance, licensing, and possibly storage and maintenance.
Those savings can add up to a lot of money over time.
Also, owning less stuff frees up time for more productive endeavors, because you have less to clean, arrange, and deal with generally.
Finally, if you sell enough of your possessions, you might even be able to comfortably move into a smaller place, saving yourself hundreds of dollars monthly on rent or mortgage payments.
8. Add To Your Income
I recently put together a list of 115 ways to make money at home. Most of them do not require long hours or any large financial risk. Of course there are a hundred other ways to make money covered on this blog as well.
Your goal, should you choose to accept it, is to sit down on one of your financial Sundays and pick one strategy for extra income.
Then implement it.
Ideally you want to choose one of the many ways to create passive income, so you can get that stream of money coming in on automatic, and then move on to create yet another.
9. Continue Your Financial Education
Not sure what to do with one (or more) of your Sunday finance sessions? Then it’s time to study, to understand your finances better, to learn a new way to save money, or learn a new way to make money.
Naturally you can continue your financial education right here.
10. Put It All Together And Make It Habitual
Some of the strategies suggested above are clearly more powerful than others, but consider what happens when you implement several of them. For example, imagine how your financial situation would improve if you did just these four things:
- Pay off debts, freeing up $150/month in interest payments ($1,800 annually)
- Find $200 in monthly expense reductions ($2,400 annually)
- Move your savings to fee-free, high-interest bank accounts ($200 extra annually)
- Create a new income of $250/month ($3,000 annually)
Those four steps would put you $7,400 further ahead in a year, and more every year thereafter.
Of course it gets even better if you continue to spend that hour every week making additional improvements, like finding better investments, or new income sources.
And the thing that really makes it all come together is making the changes into habits.
If you habitually look for ways to get what you need for less, to make a little bit more money, and to spend less than you make and invest the difference, just imagine where you can be in five or ten years