The last few years have been nothing but trouble for many people. Simply staying afloat has been the goal and if you have managed to do so congratulations. Times are changing though, and we are starting to see a little light at the end of the tunnel. Now, it is time to switch gears and look to the future in order to make things better. If you are ready to make your money great again, here is a game plan for you.
Make Your Budget Lean
First, you need to trim that budget and make yourself as lean as possible moving forward. You might think that there is no room to make cuts, but you will probably be surprised at where you can make cuts, just do a little research.
Lucky for you, there are several resources online that can help. Websites like Loan Monkey can provide some great information on how to cut expenses and make a budget work.
One such way, from the resource above, is to start meal planning. Meal planning, like the name implies, involves simply planning out your meals. When you do so, you can then buy exactly what you need when grocery shopping. This can greatly reduce food waste, allowing you to save 20 to 30 percent on your food budget.
Besides meal planning, there are countless other ways to slim down the budget. Shop for a cheaper auto insurance policy, find a more affordable internet provider, or finally cut the cable television cord. Every budget, no matter how tight, has room for cuts, you just need to look for the opportunities and put in the time.
Save For a Money Emergency
Now that you have some extra money, it is time to put it to good use by starting an emergency savings account. If the last few years have taught us anything it is that you need to be prepared for the unexpected. After all, nobody would have predicted a pandemic, so you really cannot predict what is going to happen in the future.
Let’s get prepared for the unexpected by starting an emergency savings account. Once again, there are a number of resources online, like this one, that can help you along the way. Here is what you need to know.
Your emergency account should have at least six months’ worth of living expenses in it. That is enough money to handle most emergencies that you can reasonably expect to see. Six months’ worth of expenses means that if your bills are $4,000 each month, you should have emergency savings with at least $24,000 in them. This might sound intimidating, but just take it slow and you can get there over time.
The first step should be choosing where to host your savings account. You want to open a savings account dedicated to emergency expenses so that you will not have to use it for any other reason. Online accounts are the best option but go local if you must. Once you have your account, set a biweekly automated contribution to it. Has this money been transferred into your savings on the morning that you get paid? The money you never see is harder to miss and automating your savings will make sure that it continues to grow.
Protect this new savings account by keeping it apart from your day-to-day checking. This will shield the account from being used for impulse buys.
Set Long Term Goals
Finally, set a goal that you would like to reach. We are crawling out of this pandemic, so merely surviving should no longer be your end game. Now, look into thriving.
Start with small goals and then work your way up.
The first of these goals should be filling those emergency savings, but you need to look beyond that. Once you have your emergency fund, you should investigate loftier goals such as home ownership and potential retirement. Nail these goals down so that you can come up with a relatively accurate dollar amount.
Once you have this amount on paper it will be easy to work your finances so that you can achieve your financial dreams. Simply put, the money needed to be divided by time left equals the rate at which you must save or invest.
Be Patient & Automate Everything
Once you have a plan, you simply need to stick with it, being sure to look at the big picture. This will require patience, which is something that is unfortunately not too common in this country.
We live in a world where immediate gratification is what is desired, which can make long-term planning difficult. This is why it is important to have goals and to automate the entire process of reaching them. Once you do so, you can breathe easy knowing that the future is that much brighter, at least as far as your money goes.