Personal Finance Strategies That Work!

If you ask members of any given group or audience to raise their hands if they’ve been procrastinating on organizing their finances or making a money-related decision, well—let’s just say you’d probably see a lot of raised hands if you looked around the room. Life is busy, and it’s not always a walk in the park taking active control of your financial health.

Believe it or not, personal finance doesn’t have to be something to dread. Have you ever heard the expression “work smarter, not harder”? The key to optimizing how you manage money is simply utilizing the right strategies, so you don’t end up wasting time and effort on ineffectual actions.

Here are a handful of personal finance strategies that work! Keep reading to learn more.

Stick to a Predominantly Cash Budget

Overspending is easy when you only have to swipe a piece of plastic to make nearly any purchase imaginable. It’s very important to be careful in this regard. As CNBC reports, credit card debt has hit a record high. The average American has a credit card balance of $6,375, which represents a three percent year-over-year increase.

Creating a budget is an absolutely vital part of taking ownership over your financial health. But the temptation to use credit to make purchases still lingers whether your budget says you can afford it or not. For this reason, switching to a cash-based spending system can be helpful.

This strategy involves setting aside a set amount of cash for certain categories. For example, you might put $200 from each paycheck in an envelope for food. Whether you go grocery shopping or grab lunch with your coworkers, you’ll pay with paper money from this envelope. This method curbs the possibility of overspending, as you always know how much you have left until your next pay period. You also have to physically handle the money, which can make it seem more tangible than digital numbers on a touchscreen—helping you feel the impact of your expenditures.

Act in the Short Term, Plan for the Long Term

The next strategy is simple but effective. Think about how every financial action and decision you make will impact you in both the short and long terms. Andrew Housser, a debt relief expert and CEO, calls upon this strategy in his own life: “[I] ask myself, ‘Where do I want to be in 1, 3 and 5 years from now?’ Then try to take actions to help make that a reality.”

Here’s how it might look in action: Alex wants to take a trip to visit some friends in another city. It’s tempting to hop online and book a reasonably priced round-trip airline ticket and reserve a room—especially if she puts it on her credit card. Before doing so, Alex checks in with her money goals, which helps her remember she’s aiming to pay off her auto loan by the end of the year. Instead of giving into immediate gratification, she sets an alert for cheap airline tickets and waits a few months until the price has dropped drastically. Yes, she’ll be visiting in the “off-season,” but she’s also able to pay off her vehicle and avoid racking up credit card debt with interest. It’s a win-win.

Each action has a ripple effect; think how it will affect you in future months and years to guide decision-making.

Strategize How You’ll Eliminate Debt

Debt elimination doesn’t have to be a shot in the dark. If you feel like you’re making payments here and there without making a dent in your debt, it’s possible you need to overhaul your strategy.

Consider choosing to “avalanche” your debt by paying off the highest interest rate first, then working your way down the line. Or start with your smallest debt and work your way upward, gaining confidence as you go. If you’re facing more than $5,000 to $10,000 in debt, research debt relief strategies like settlement and consolidation.

These personal strategies work for consumers willing to commit and plan ahead.


Arnel Ariate is the webmaster of Money Soldiers.

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