With Sunday and the week ahead of you, money may be weighing on your mind. Improving your personal finances may mean any number of things. How can I save more? How can I increase my income? How do I start? Here, we've put together a list of three small steps you can take now to improve your finances:
1) Ask yourself why: what is it about today that has made you stop and think, "I really need to do something about my money." Have you just received a bill that you can afford to pay? Do you feel like you're already good with money and want to enhance what you're already doing? Defining the reason for the change will help you create a more specific goal for your money. Many of us know that we should save more, spend less and diversify our income streams, but because those are all generic ways of improving our finances there's little we can act on specifically. If you want to save more, what are you saving more for? Retirement? A holiday? Getting to the bottom of the 'why' will give you a clear picture of what you're working towards. Then you can work backwards and see what little steps you need to take to get there.
2) Create a money folder: Find a physical or create an electronic folder devoted to your personal finances. Get all your paper or electronic documents in one place and create categories relevant to you. To keep it simple to begin with you can use three categories: earnings, savings and liabilities/debts (what you owe). You don't have to do anything with the documents. This step is just about knowing where it all is. There's just one place you can go to for information.
3) Create a list of your habits: Charles Duhigg, author of The Power of Habit, explores habit formation and how buy recognising our daily habits we can transform them to work more in our favour. If you don't know what your habits are, start by looking at what you did automatically today without thinking. Your friends and family may have a better idea, so ask them what they think your habits are. By looking closely at your habits, you can identify habits that are negatively impacting on your personal finances.
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Although the steps we've outlined are small and you may not feel the benefits immediately, it's important to remember that taking small steps everyday will benefit you in the long run. You'll become more aware of your actions and gradually change your situation for the better.
Already taken these steps and want more drastic steps? Join Life-Life Balance next week for three big steps you can take to improve your finances.
All information provided at Life-Life Balance is for informational purposes only. MM is not a qualified financial advisor. Before making any decisions on your finances you should seek advice from a qualified advisor.
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