Easy things you can do today to improve your finances.
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“What can I do to improve my financial situation?”
“Can my partner also affect my money situation?”
“What factors might affect my money situation?”
Have you been asking yourself these types of question more than usual lately? If you have, you are NOT ALONE! The cost of living has been rising , more people are spending way more money to keep up their standard of living and inflation has now been documented at reaching 40 year record highs. More than anything, people have been forced to ask themselves these questions to figure out how to reduce financial stress and financial insecurity.
To deal with these changes, people have been getting scrappy , they have been trying to find ways to save money or they have been trying to find ways to earn more money such as having 2-3 jobs, trying to build side hustles or changing careers. While all of these are commendable ways to cope with these changes, what is also important is building good financial habits and building financial literacy.
Good financial habits and financial literacy are linked. If you know about your money and the way it works, you are more likely to build good financial habits. The more information you have on this subject, the more are able to handle changes or even financial emergencies or surprises. Building good money habits can help you build your confidence and can help you make good overall decisions in the future.
Money and love are also linked. The person you choose to love and share your life with can have a big impact on your finances. If you have a supportive partner who has good financial habits and is financially literate, they are most likely not to drag you down and can help encourage you to get your own money habits on track. They are also least likely to get you into a financial pickle such as asking to borrow money, messing up your credit, or essentially forcing you to work while he lays around the house all day doing nothing. A partner who is NOT financially responsible and has poor habits is likely to cause you stress and change your life in negative, significant ways.
While money and love are linked, you are not entirely powerless. You can build up your own financial literacy and habits and because of this, you are not dependent on anyone else for your wellbeing because you have built up the resources and knowledge to leave a situation or leave a bad partner. Solely depending on someone else for security, is not entirely a good idea. We’ve heard many stories about “trad wives” who have dedicated many years to not working, raising their children and keeping a home, only to be left out in the dust when their husbands leave them for someone else. They have no money and have no idea what to do without someone else. It takes them a long time to figure out life, because they were depending on someone else.We have also heard about relationships that go sour and become abusive. A woman who is being abused is likely to stay if she doesn’t have enough money to leave the relationship and she is more likely to stay because she can’t fathom how she will survive without their abusive partner who often also controls the money. Or on a more tragic note, what if a partner dies and he was the one that was working, and managing finances? Many widows find themselves unsure about what will happen next, as their partners were the ones that were handling the money or were the primary breadwinners. They feel fear and paralysis about how they will survive and sometimes make poor decisions such as marrying someone very quickly, who might be terrible, just to be taken care of.
Knowing about money not only helps you feel more secure, but can be a literal lifeline if a situation, like a bad relationship or losing a job, does not work out.
So how does one begin to improve their financial situation? Here are a few easy and practical ways to get started!
Open a High Yield Savings Account. I was 35 when I opened my first HYSA account! So it is never too late for you to start. High Yield Savings Accounts or High Interest Savings Accounts are not like your typical Chase, Bank of America or Wells Fargo accounts. Traditional banks only pay you literal pennies when you open Savings Accounts with them and keep your money with them ( like .01%), but HYSAs pay you a percentage between 4-5.50%. These accounts earn rates better than the national average which is at 0.46% at this point. Can you imagine saving your money and earning all that extra cash with these rates versus just keeping your money in an old traditional, boring Savings Account? That seems like a no brainer to me. Just make sure you open an account with an FDIC insured bank and one where you can regularly check on. A lot of these banks are online, but some of these banks even send you a bank card just in case you need to take your money out at an ATM. You can keep your money safe and there won’t be a penalty with taking it some of that out if you need to.HYSAs are good for short term goals such as building an up an emergency savings fund, saving up for a vacation or saving up for a house. Imagine your money earning all that sweet sweet interest?
Increase your savings amount each week. While you are trying to figure out the best ways to save on groceries or save on services like cell phone bills, you also want to increase the amount of money you save each week. Whether that is $25, $50 or even $100, any amount is a good place to start. The more you save, the more you are able to plan for unexpected expenses or financial emergencies such as a sickness or injury, a car repair, a last minute school event, a pet getting sick, or even a leaving a romantic relationship. Having a financial cushion helps you feel safer and more secure, no matter what life throws at you. And if you are increasing your money saved, put that in a HYSA why don’t you?
Improve your Money Knowledge. Money can be a scary topic! And many of us have probably ignored our bills or accounts for some time because we felt uncomfortable about the things we needed to do or take care of, but when we know a little more about money and learn some strategies about working with money- those feelings are less likely to turn their ugly heads at us and we are less likely to do nothing about it. Here a few books and resources I found helpful when starting my own financial literacy journey The first book, I ever read was Ramit Sethi’s “ I Will Teach You To Be Rich”. Ramit teaches about budgeting, paying off debt, saving and investing. His book is simple to understand and he has a 6 week plan to help you get started on tasks right away! You can buy the book or find it at your local library. It is that good. “Quit Like a Millionaire” by Kristy Shen and Brian Leoung, covers more than budgeting, paying off debt, saving and investing. It also covers important things like self employment, having a business, health insurance, life insurance and WHAT TO DO WHEN YOU ARE READY TO RETIRE. This goes a little more into what you can do when are you a little more advanced in your financial understanding and strategies. This is a wonderful book to keep on your shelf as well. And finally, if you are a visual/auditory learner, I highly recommended Delyanne The Money Coach’s Slay The Stock Market course. She has video lessons that cover paying off debts, saving money, investing, earning more money, retirement and more! She also includes many bonus lessons, which offer conversations with experts who have built businesses, those who can help you improve your money mindset, those who know about home ownership, those who have information on estate planning and end of life planning, and more! I really love what she has to offer and I think you will too. If you would like to know more about the course, check out the link above or check out her social media pages.
Have a Debt Pay Off Plan. The most common type of debt in the United States is credit card debt. Credit cards have a way of luring people in. Unfortunately, people may misuse credit cards and can then end up being in more debt due to the high interest rates that credit cards can accumulate. While many cards have 0% introductory rates, after 12 to 18 months, credit cards rates can increase up to an average of 24.74% APR. However, this card rate can vary depending on the credit card issuer, credit score or card type. Even someone with an excellent credit score, can have a rate at 20.99% . Someone with a poor credit score, can have a rate up to almost 27%. Credit cards essentially let you borrow money, but it comes with a price. You have to pay back the amount you borrowed, but then you also have to pay off interest on the amount borrowed. If do not pay back the money right away,the interest keeps accumulating, and then you owe even more money back. Having a debt pay off plan is important so one doesn’t become overwhelmed by debt. There are a few approaches, but here I will share 2. First take a look at your debts. It will be scary, but it will help you decide what you want to do. Take note of the amount owed and the interest rate of each card. The Debt Snowball Method focuses on paying off the cards with lowest balances first. Put the cards in order from the least amount of balance to the most. Which is the card with the smallest balance? You will then start paying a little more than the minimum amount on this card, while you still work on paying the minimum payment on the other cards. With this method, you can start paying off cards one by one( in order from least to most balance) and get some pretty good gains and motivation right away! The other method, The Debt Avalanche Method, focuses on paying the card with the highest interest first. You will pay off a little more than the minimum for that card, while paying the minimum payment on the rest. Once that card is paid off, you will then work towards paying the next card with the highest interest. This focuses on the interest not kicking you so hard in the ass. There are more methods, but these are two that can help you build up good habits by looking at your money on a regular basis and working on a plan to pay off debts every month with a purpose. Bonus tip: Automate your payments. Schedule your payments every month at the minimum balance and make the card of focus’s payment higher on automatic payment as well. You can set it and forget it! But don’t forget to check in every few weeks to check the progress towards pay off. Remember, we want to keep focused on our goals!
5. Play with additional ideas on how to earn more money. While getting started on saving and paying off debts are great skills to work on, having extra income can help you in more ways than you can imagine. Take a look at this quote “ You can’t outsave what you earn!” Saving money is important for very many reasons, but you are limited by what you earn. If you earn $30,000 a year, after rent, bills and other things, you will not be able to save more than a percentage below that. But if you find ways to earn some extra money, you can put that away for your savings and investing! Earning extra money may look like getting a part time job, selling food or baked goods, selling snacks or candy, selling crafts, doing some tutoring, babysitting, working for InstaCart or Amazon Flex, selling items on EBay, OfferUp or Facebook Marketplace, dog walking or pet sitting, freelance work like bookkeeping, photography, web design, or make up and hair services, applying for a higher paying job, etc. What are some things you might be interested in or talented in? If you decide to take this step, brainstorm with supportive people and ask for support in helping get that word out. Tell people what you can do, offer to help them, and open yourself up to opportunities.
To conclude, here are some simple and basic ideas to help you get started on your financial wellness. Not only is our mental and physical well being important, but having our own ways to care for ourselves and build security with our finances is key. Don’t let yourself be at the mercy of someone else, and start looking for ways to empower yourself in your life. Get money smart and start buildng that bag.
Keep reading and keep taking care of yourself,