It’s no secret that even the smallest of financial woes can cause a great amount of stress in one’s life. However, what many don’t realize is that outside stresses in their lives can lead to even more financial uncertainty. The following twenty steps will help anyone, regardless of their goals or debts, see a more certain financial future.
1. Go minimalist. Take a look around your place and look at everything you own, from clothes to old textbooks to music. Write everything – yes, everything – down. Seeing the items catalogued will give you an idea of what you truly need and what is expendable. Then rid yourself of at least 50% of those items within a couple weeks. You can try to sell them or even donate them. It frees up your space, brings in some cash, and frees you from the burden of having too much junk.
2. Keep your collections small. Having liquidated your own personal possessions, maintaining that minimalism is now just as crucial. So when you bring a new pair of pants home, throw out at least one, if not two of your older pants. You’ll be surprised how your spending habits shift.
3. Kick your debt in the ass. It’s not as difficult as you may think. When prioritizing your financial goals, ridding yourself of debts to credit cards, student loans and the like should be your number one priority. Make a pact with yourself not to spend money on things that can wait until you’ve gotten rid of at least one debt, if not two. If you still have massive student loan payments to make, why are you buying a car?
4. Take the bus. Or carpool. Or walk. Or bike. Unless you’re in a situation where owning a car is do-or-die, hold off on it as long as you can. Owning a car is expensive as it is, and only leads to more frivolous use. When you own a car, you’re more likely to drive somewhere relatively close than to take a fifteen-minute walk.
5. If you must have a car, make it sensible. Seems like a no-brainer, right? But for those with little experience in purchasing vehicles, some things are not exactly obvious. For some reason, many drivers never consider the option of a used car and instead opt for the newest model. So head over to used dealerships and do some research. Don’t make the mistake of believing that only new cars are easy on fuel. You can still find a slightly older car that won’t guzzle your gas like crazy.
6. Don’t become a multi-car household. So you absolutely need a car to get somewhere. But does the rest of your household each need their own? The more cars in a household, the more money is wasted on useless car trips. Reduce your carbon footprint and alternate who uses the vehicle, and have the other rely on alternate modes of transportation. Additionally, if you and your partner share a car, you’ll also share expenses for it, which takes some more stress off of your wallet.
7. De-clutter everything. Not just in a physical sense. If you find your life scattered and you are spreading yourself thin over multiple hobbies, an erratic sleeping schedule, and inconsistent eating habits, streamlining those areas of your life can lead to less stress, more sensible spending, and a healthier outlook on life. While you don’t want your life to be dry and predictable, instability is never healthy. So stick to somewhat reliable habits, and you will find yourself more balanced.
8. Take out a consolidation loan. For those with high-interest debt, consolidation might be the key to success. It’s important to not use this as an opportunity to ignore your debt. Remember that your debt still exists, it’s just all in one pile now, which makes it easier to pay off.
9. Consolidate your own money too. Do you really need several savings or checking accounts? Consolidate your money into one of each and keep it that way. This way, you can keep clearer track of your cash.
10. Get rid of your credit cards. Many people start with one, then apply for a store credit card every time the opportunity comes along. Pay them off and then get rid of them. Even things that must be bought online are usually luxury items and not really necessary. Don’t worry about your credit rating. Paying your bills on time does the job.
11. Budget, and keep a physical copy of it. Creating a budget [link: The Idiot-Proof Guide to Budgeting] is your first step towards financial freedom. More importantly, create that budget on paper, not your computer using overpriced software. Once you’ve worked everything out and you have your budget looking how you like, hang it on your fridge or somewhere where you’ll see it every day. Being reminded of your income and expenses will do way better than leaving it on your hard drive and never glancing at it again.
12. Have a “bill paying day.” One day each month should be your day to take care of all your bills. No, not every bill is due at the same time (or even within the same week), but use that as an excuse to make payments for some things early (never late). Think of this as a dependable, consistent day that you don’t deviate from – it makes your financial life seem less erratic.
13. Pay with cash. Take out some cash every now and then and consider that your “fun” fund. Using cash is a more personal experience and reminds you that money does not grow on trees. The convenience of using a debit card for everything often causes people to lose track of how much they spend. Watching where your money physically goes is great for you and your bank account.
14. Don’t be so obsessed with owning. Too many people place importance on owning a house, owning a car, and making everything 100% theirs. That’s not to say that no one should own a house or car, but that there’s no shame in renting until you know you are completely prepared to do so. Owning these things is a huge and complex commitment that you should make sure you’re ready for.
15. Don’t go for a dream house. When you do buy your house, consider that bigger isn’t always better. What you need is room for your family and maybe a guest room, a living and dining area that you can all fit into comfortably. The maintenance costs of a larger home (as well as the obviously higher price for more square footage) are almost completely unnecessary. So sacrifice a few square feet for practicality.
16. Realize your own value. To quote the Joker, “If you’re good at something, never do it for free.” If you find something you do that you are good at, play to that strength, especially at work or as a freelancing entrepreneur. Increased self-confidence and concentration on one skill will streamline your working style and take obvious stress off your life.
17. Barter. Many of the tips explored in this list may be difficult with smooth-talkers trying to steer you in a different direction. Learn how to stand your ground through a few simple experiences – like practicing with a fried, or even taking a trip to a flea market to learn basic negotiation techniques.
18. Don’t take advice from everyone. Everyone and their dog has advice for you, but you’ll find most often that that advice can be conflicting and even contradictory. Stick to as few sources of financial advice as possible. Shut out others entirely. They throw off your mojo and strike you off your path to success (and a bit of advice: don’t shut this list out).
19. Don’t let the stock market become a roller coaster. There’s comfort in buying stock and then holding. The more erratic you get, the more you piss away on “insider tips” that are shot at you left and right, the more unpredictable it becomes. Take the stock market slowly and don’t be impulsive or easily influenced – there’s no shame in playing sensibly.
20. Take your goals slowly. This is the most important thing to remember. Rather than spreading your attention to a multitude of different finance goals at once, concentrate your attention on only one matter. Don’t give a second thought to making a down-payment on a house until your student loans are paid off. Don’t concern yourself with one goal until you’ve gotten another out of the way.
