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When people think about improving their finances, they think it will be painful and complicated. But it doesn’t have to be. You won’t feel the pinch too much when you use these 15 easy ways to improve your finances.
Nearly all of us could stand to improve our finances, and we have every intention of doing so. But either we never actually get around to doing it, or we get overly ambitious, try to overhaul everything at once, and give up because it’s just too hard.
Let us convince you to give it one more try. We promise these are easy ways to improve your finances.
Budgeting is the single most effective way to improve your finances. If you don’t know how much you have coming in and going out, you can’t meet your financial goals whether they are paying off debt, saving for a home, or taking a vacation.
So why doesn’t everyone have a budget?
Because budgeting can be a hassle and time-consuming. But it doesn’t have to be. The internet has made life easier in lots of ways and budgeting is one of them. If you have tried and failed to set up a budget in the past, Mint is here to save the day.
Mint is a free, easy to use budgeting program.
Once you link your bank and credit card accounts (your information is safe. If someone nefarious could see your account, it’s read-only.
They would be unable to make any transactions. And Mint is owned by Intuit, the same people who own Turbo Tax), the transactions are automatically pulled into Mint.
You then set up your budget categories, and they can be as general (Utilities) or as detailed (Electric, Water, Phone, etc.). That’s about it.
You’ve created a budget! The only thing that you need to do in Mint regularly is to go through Uncategorized Transactions and assign them to a category.
Using Mint was my first step when I decided I needed to start being better with my money and I have been using it ever since. It makes every other personal finance related improvement you want to make easier.
2. Budget For Yearly Expenses
Great, you’ve set up your budget in Mint. You have categories for all of the things you pay or buy monthly like rent or mortgage and groceries but what about yearly expenses?
Be sure to set aside money for things like property taxes and gift buying holidays too. They don’t exactly creep up on us; they happen the same time every year.
But if we don’t plan for them, they can come as a nasty surprise as far as your monthly budget goes. The best way to handle these yearly expenses is to divide the expense by twelve and set aside that much each month for them.
3. Start an Emergency Fund
If budgeting is the most effective way to improve your finances, having an emergency fund is the most effective way to sleep better at night. An emergency fund is money you save for unexpected, essential expenses.
An emergency fund can save you if you lose your job, get a tax bill, or need a home repair.
The ideal emergency fund has three to six months of basic expenses saved. That is a lot of money for most of us, and it can take a long time to save that much. That’s okay. We just want you to start an emergency fund.
A good goal for a starter emergency fund is $1,000. While that might not be enough if you lose your job and it took a few months to find another, $1,000 can go a long way to helping with a less catastrophic emergency expense like a new set of tires or washing machine.
4. Automate Saving
We might have good intentions when it comes to saving money, but life can get in the way. You have to be deliberate about saving money. The best way to make sure that you are regularly saving is to pay yourself first, and an easy way to do that is to automate your saving.
There are a few ways to do this. If you are saving money by keeping it in a savings account and your paycheck is direct deposited, ask your Human Resources department if you can use two accounts. Part of your paycheck goes into your checking account, and part goes into your savings account.
If this is not possible you may still be able to do something similar if you bank online. Most banks allow you to set up an automatic deposit into your savings account. If you save into an investment account, you can set up automatic payments for that too.
H0wever you do it, the money is out of your checking account before you have a chance to spend it.
5. Get 401k Matching
If you are lucky enough to have a job that offers 401k matching, be sure to take advantage of it. For one thing, it’s an easy way to automate saving as we’ve already discussed.
But even better, that matching money is free money which is something you almost never come across.
The programs vary but typically, an employer will match a certain percentage of your contribution up to a portion of your total salary. Some employers match your contribution up to a specific dollar amount regardless of your salary.
6. Take Advantage of Workplace Benefits
A 401k with matching may not be the only perk your job offers. You may be eligible for things like an HSA, or flexible spending accounts for things like commuting or childcare expenses.
Your health insurance may offer perks like free gym memberships or other wellness resources.
Your job might even offer free entertainment on your days off. I worked at a place that donated to all sorts of cultural institutions in New York City, things like the ballet, the Opera, the Metropolitan Museum, and MOMA, and employees could get discounted or even free tickets to them.
7. Adust Your W4
You might look forward every year to getting back a big tax return, and we can understand that. It is a method of forced saving which is suitable for those who struggle to save money.
But getting back a refund is not ideal. What it really means is that you’ve overpaid your taxes and in doing so, have given the government a year-long, interest-free loan.
To find out the number of exemptions you should take to get a very small or no tax refund at all, you can use the IRS Withholding Calculator.
When you do this, you will get more money in each paycheck. Be sure to use that money to meet a financial goal, don’t just blow it on stuff you don’t need.
8. Get Renter’s Insurance
If you live in an apartment, you must get renter’s insurance. Many people don’t bother because they think it’s too expensive or that whatever insurance their landlord has would cover any damage to the renter’s property.
Both are not true. Renter’s insurance is cheap. You can get it for less than $20 a month.
And the insurance the landlord has will cover their losses, not yours.
If there were to be a fire or some other disaster in your apartment or your building and you lost everything because you weren’t willing to part with $20 a month, you would be kicking yourself.
And depending on the policy, renter’s insurance can cover things like theft, loss or damage to some belongings.
9. Start a Side Hustle
If you have ever suffered a job loss due to your fault or through no fault of your own, you know how scary it is to have your only source of income suddenly taken away from you.
That feeling is why you should always have more than one source of income. Not only does it give you a sense of security, but it makes it easier to meet financial goals.
Most jobs don’t give a raise more than once a year if they even give them that often so if we want to make more money, we have to have a side hustle.
A side hustle doesn’t have to be a formal, part-time job although it can be but those kinds of hustles generally come with set schedules which won’t be ideal for everyone.
It’s easier to fit a side hustle whose hours you control into a busy life. You can clean houses, mow lawns, perform odd jobs, take surveys, drive for a ride-sharing service. The possibilities are almost endless.
Even if you only have a few hours a week to devote to bringing in a second source of income, it’s well worth it. A better use of your time than watching television or playing video games.
10. Sell Some Stuff
We have too much stuff, and a lot of it never gets used. It’s taking up space in your home, both physical and mental. Get rid of some of that stuff. But wait. Some of it is too good just to be thrown away. You aren’t going to throw it away. You’re going to sell it!
It doesn’t matter how or what it is. Sell books at a used bookshop. Sell clothes on Poshmark. Sell furniture on Nextdoor. Sell anything at a garage sale.
Not only will you declutter your house and your mind, but you will also bring in a little extra money. Maybe a lot of extra money depending on how much and what kind of stuff you are selling.
You might find you like it so much that you turn it from a one-time thing into your side hustle!
11. Talk About Money
Money is often seen the same way as sex, religion, and politics are. Something that should not be discussed. But if you don’t talk about money, you are losing a lot of opportunities and may even be hurting your relationship or family.
Talk to your partner about money. Doing so regularly can prevent a lot of fights and even divorce. Talk to your children about money. Schools don’t teach personal finance, so if you don’t teach them good money habits, they aren’t going to learn them.
Talk to your parents about money (this may be the hardest one). You don’t want to be in a position where this information is critical, but your parents are not well enough to discuss their situation and their wishes.
Talking about money doesn’t have to be awkward or intrusive. You don’t ask people things like how much they earn or how much credit card debt they have (unless they are close family). You have to be more graceful than that.
If you have a friend who seems financially savvy, ask them for their three best pieces of money advice. If you are considering a career change, attend networking events and ask people what for a range of what an entry level person in their field can expect to make.
Ask your parents what kind of arrangments they have made if they are no longer able to live independently. The answer may very well be “None” in which case you have many more discussions ahead of you. But that’s okay. The important thing is to get the conversation started and to remove at least some of the stigma surrounding money.
12. Cut Your Food Budget
Almost all of us could easily cut down on our food expenses. Really, take a look at your food-related transactions for a month, and you will be shocked at how much you are spending. Some areas of your budget are painful or impossible to cut, but food is not one of them.
I’m not going to go into a ton of detail on this because you all know it already. Plan your meals, shop from a list, use a slow cooker, cook in batches, bring your lunch from home.
You know all that. I’m just encouraging you to look at how much you are spending here because it’s almost certainly more than you need to and it’s an easy area to cut back on without much effort or feeling deprived.
13. Pay Off One Debt
Well, we would love it if you could pay off all your debt! But that’s not realistic for everyone. But by hyper-focusing and working hard to pay off one debt, a few things will happen.
You will have one less debt, always a good thing! You will have freed up extra money to pay off another debt.
You will have a feeling of accomplishment and relief, and those feelings may make you feel motivated to pay off another debt. I have been in debt in my life, and it felt like it would never end.
But when I got fed up and paid one, relatively small debt, I felt better. And I wanted to keep feeling better. So I worked hard to pay off all the debts.
It took a long time, but I did it. And I know a big part of what drove me forward was paying off that first debt. I knew that I had done it and so I knew I could do it again.
Try it. Pay off your smallest debt, even if it takes a long time. It’s like the first domino falling. The ones after it, fall easier.
14. Check Your Credit
The better your credit score, the less you pay for things like a mortgage or a car loan because those with the best credit scores get the best interest rates when they borrow money and interest is the cost of borrowing money.
If you have no idea what your credit score is, go to Credit Sesame and find out.
Not only will you see your score, but you will see what that score is made up of and where you can improve if your score is not quite where you want it to be.
Even if you have no plans to borrow money in the near future, you should still know your credit score. There are ways to improve it, but it doesn’t happen overnight.
If you start working on your score now, you will have time to improve it before you are in a position to buy a home or a car.
15. Get a Better Deal
We all know that we can probably pay less than we are for things like cable, internet, and our cell phone service but we don’t have the time or the inclination to shop around comparing prices and then calling up the companies to switch our service.
But doing so really can save us a lot of money.
Those providers all have a lot of competition, so they are always offering deals to entice new customers or to keep existing ones. If you really can’t be bothered, but you still want to save money, you can use Billshark.
Billshark will negotiate a better deal for your cable, wireless phone, satellite TV, internet, satellite radio, and home security system.
The service is not free. They charge 40% of the total yearly savings they were able to get for you. I have used Billshark twice, and they have saved me a few hundred dollars a year.
Room to Improve
Everyone has their money hang-ups, and some of them are bigger and harder to fix than others. But these are all things that anyone can do, relatively easily and quickly that will improve their finances.
There are 15 easy ways to improve your finances on this list. If you did one thing a month, imagine how much better things could be in just over a year.