4 Steps to Improve Your Finances

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Smart money management leads to a happier, healthier life. Yet, so few of us take the necessary steps to get our financial house in order. Consumer debt is at an all time high. As of 2018, we have collectively reached $13 trillion in total debt. This includes credit cards, mortgages, personal loans, and student and automotive loans. There is no sign of these balances slowing down, and it creates an eye-opening upward trend that we should all be concerned about. It's important to take steps to while you are young and have time to positively impact your finances.

Save Regularly

Putting as little as three percent of all your income aside is a good way to develop a savings habit, according to experts. Whatever percentage of income you decide on, stick to the plan and ferret the same size piece of paychecks into a savings account. In fact, no matter the source of money you receive, put the set percentage aside for a rainy day. Later, when your income stabilizes and things improve, consider upping the amount to 10 percent. Small steps now, can lead to big gains later.

Don't Live Paycheck to Paycheck

Living paycheck to paycheck is the very essence of what we want to avoid. Quite simply, you can either find a way to make more money or spend less of it. That's obviously easier said than done. There are a plethora of side hustles out there that can create another income stream. Find something you are good at, enjoy, and a niche that is in demand. Conversely, you can start watching your money and cutting back on unnecessary expenses. This is probably a bit easier to accomplish, though not as effective as making more money.

Use Student Loans to Finance Your Education

If you decide to improve your lot in life by obtaining a college degree, take advantage of student loans in order to finance your education. It's a strategy that won't stress your budget and allows for longer payback periods. Shop around and compare interest rates, terms, and all the fine print. It's important to weight the cost-benefit of your intended degree. It's typically not advisable to spend six figures on a literary arts degree, at least if successfully paying back your loan is the eventual end goal.

Budget for Vacations and Entertainment

When you are gainfully employed, be sure to make room in your budget for relaxation. That means an occasional vacation, a movie every so often and a night on the town now and then. The human body needs to relax and enjoy itself from time to time. Earning more, spending less, and investing in yourself are all important goals in life. However, they shouldn't negate the benefits of enjoying one's self, and living a balanced life that is about smarter spending.