6 Ways to Get Back on Financial Track This Year

It’s never the wrong time to start reconsidering your finances.

Money management is a vital life skill that many of us take for granted, especially when we find ourselves trapped in an endless cycle of bills and debt. These six tips will help you begin to design a budget, build a healthy financial foundation and start thinking smart about money.

1. Look at Your Spending First

You might find yourself constantly thinking, “If only I made more money.” While having a substantial income can help people quickly get out of debt, money does not absolve all problems. It definitely doesn’t help you save, especially when a lot of your biggest expenses are coming from unnecessary spending.

More money requires even more attention to detail. Print out your most recent bank statement and pour over all your withdrawals. What are you spending the most on every month outside of essentials? Identify your non-negotiables first, then start breaking down and weeding out lunches, coffee runs and shopping trips that are draining your budget.

2. Find Ways to Save on What Matters Most

There are plenty of things we can’t live without but cost far too much to help us save. But the good news is that you don’t have to live entirely off the grid in order to start saving money. There are several ways you can cut down on everyday expenses such as:

  • Switching to a more affordable phone plan.
  • Packing lunch and bringing coffee to work.
  • Replacing expensive cable with a streaming service like Netflix.
  • Cancel club memberships or subscription services you don’t use often.

3. Set a Goal

There will be many different goals throughout your life. You may strive to buy a house, save money for retirement or go on a great vacation next year. Your budget will change according to your objective, so you need to have a solid idea of what you’re striving for and where you’re headed.

SMART goals to motivate yourself; specific, measurable, actionable, relevant and time-bound savings plans will make it easier for you to track your progress and feel a sense of accomplishment.

Goal-setting is one of the pillars of our 52-week money challenge. It’ll help you get serious about savings and learn to break your goals down into more manageable segments.

4. Find Small Ways to Earn More

Taking a second job is probably the last thing you want to do right now, but it can help you get over a financial hurdle more easily. Even an extra $500 a month can help pay off debt or lingering credit card bills. You don’t have to keep it forever, and there are flexible jobs like dog-walking and ridesharing that let you earn on your own schedule.

If another job is out of the question, you aren’t out of luck. Take a look around your house and consider holding a garage sale, selling old clothes or even getting rid of a lesser-used second or third vehicle.

5. Start Paying With Cash

It’s easier to overspend when you pay with a card. Physically parting with cash can be harder than swiping your Visa, so taking $25 with you to the store can quickly help you build greater financial awareness and self-discipline.

You can also start to use cash to pay for everyday expenses like groceries and gas. Any leftover funds will give you a better visual of how much you’re really spending and how much you actually need. Residual funds can be put into savings or toward paying off debt.

6. Pick the Right Savings Account for Your Needs

While you can always leave money in your bank, it’s beneficial to open a savings account. Not only does this prevent overspending, but savings accounts also come with a variety of rewards and benefits.

A high-interest savings account is a good way to earn money while saving; it’s also possible to open multiple savings accounts for different purposes such as saving up for a mortgage, putting money away for a college fund or paying off debt.

Words of Encouragement

Remember that getting out of debt is much harder than falling into it; acquiring financial stability takes time, patience and humility. With some self-reflection, commitment and maybe even some much-needed forgiveness, you can start to rid yourself of stress, money anxiety and bad habits.

Don’t be afraid to reach out for help, either. A financial advisor can help you begin to understand the ins and outs of your budget, identify your needs and set the right goals for you.

While you are visiting this website, check out the Budget Coaching services available through Financial Counselor, Judy Lawrence.

About the Author
Brandyn Morelli is CEO of Tilt Metrics, a B2B growth agency based out of Providence, RI. He is also the co-founder of HelloCecil, a SaaS platform helping small businesses make smarter hires through video interviewing.


BONUS TIP for Ultimately Buying a Home

In the last couple of years, the real estate market and mortgage rates have fluctuated tremendously. If you’re waiting to buy a home in the future, it doesn’t mean you can’t start planning now. On the contrary, planning and budgeting ahead of time can give you a major advantage because you will be prepared and already have covered the basics.

Before getting into the numbers and how much your mortgage could be, open the discussion with your family about what are the needs and wants of this future house. Questions such as: Do I prefer a condo or a single-family home?, How much space do I need?, Do I need an extra room for an office?, Would I be comfortable in the city or the suburbs? These questions can help to narrow your home search and the options available in the market.

Going into the topic of finances, having a budget is essential. Set a number on how much you will be able to save for a down payment and how much you would be willing to negotiate if there are multiple offers on the same property. You can use a debt-to-income ratio calculator to know the percentage of your income used to pay debts. This is a key financial metric that lets lenders know if you’re a low or high-risk borrower, and they will determine the next steps of your mortgage application and amount.