Are you looking for ways to improve your finances today?
Sometimes, you just need to do something now to feel like you’re on the path to financial security.
There are all kinds of things that you can start doing today to improve your finances fast.
Here is a list of ways to improve your finances:
- Create a
budget - Set spending goals and create a spending challenge
- Set saving and investing goals
- Check your credit reports and scores
- Create a personal balance sheet (financial statement)
- Update your W-2
- Evaluate your health insurance and employer benefit options
- Create a debt overview
- Create a financial overview
- Research tax-advantaged investing accounts
- Write down your financial goals
- Create a plan to pay off debts
- Research ways to improve your long-term income
- Check your investment asset allocation
- Evaluate your bank accounts
- Consider refinancing debt
1. Create a Budget
You can improve your finances by creating a budget for your income, spending, and savings expectations.
Creating a budget will get you thinking about your money and where it’s going.
Do you know how much you’ve spent on clothing for the last 6 months?
What about eating out?
With a budget, you’ll have a sense of how much you’re spending on average over time.
Too often, we can make poor financial decisions because we don’t know how much we’re spending.
If you need some help building a budget, check out our posts:
- What is a Budget?
- Simple Budgeting for Beginners
2. Set Spending Goals and Create a Spending Challenge
It’s always easier to spend less money than to make more money.
If you have a budget, set some spending goals for the next month or quarter.
Challenge yourself to reduce spending in a few areas of your discretionary or nonessential spending.
You’ll be surprised at how aware you become of your spending.
Sometimes to change habits, you have to become hyperaware of your actions.
We challenged ourselves to not eat out for month.
We quickly realized how often we ate out just because we couldn’t come up with another option.
But, after two weeks we adapted and made a lot more food at home.
We also felt a sense of accomplishment after we finished the month.
Not only that, we didn’t go back to eating out nearly as much as we did before, saving us money over the long-run.
3. Set Saving/Investing Goals
The easiest way to ensure that you’re saving money for your future goals like a home or retirement is to put the money out of sight.
Set goals for an amount that you’ll put into a savings or investing account each month.
These goals could be set for every time you receive a paycheck, monthly or even quarterly.
By doing this you are realizing a few benefits.
First, by putting the money somewhere else, you’re less tempted to use it right now.
Additionally, the faster you put money you put into a high-yield savings account or into investments, the faster these assets will start to grow.
While equity investments (stocks) can have fluctuations, a savings account or a debt investment (like a US treasury bond) pays interest payments which compound.
Each day your dollars sit in an account that doesn’t earn interest, you’re losing out on compounding money.
Equity investments tend to grow over the long-term but can have large fluctuations up or down in the short-term.
With your savings goals, you get the benefit of an average investment value by investing multiple times.
For example, let’s say you set a savings goal of investing $500 out of every paycheck in an ETF tracking the S&P 500.
Over the next three paychecks here are the prices of the ETF:
- $255.89
- $251.45
- $253.08
By investing from each
With spending goals and set investment frequencies, you smooth out some of the fluctuations of public equity investments.
4. Check Your Credit Reports and Scores
Each year you can check your credit reports for free.
You can check these reports for discrepancies and errors which may be harming your credit score.
And, if you find an error or something that doesn’t look right you can contact the credit agency to remove the error.
This may improve your credit score and your ability to obtain credit and at a lower interest rate.
You can also check your credit score if offered by your bank.
The larger banks in America tend to offer a credit score for you pulled from one of the reporting agencies.
5. Create a Personal Balance Sheet
Creating a personal balance sheet is a great way to organize your financial assets.
A personal balance sheet is a list of all of your assets and liabilities which you can use to determine your net worth.
Assets are all the things you own like cash, a home, a car, or investments.
Liabilities for personal finance are all of the things you owe money on which are usually debt balances.
6. Update Your W-2
Have you changed marital status or had a child? Or, maybe your partner just got a new job.
It may be worthwhile updating your W-2 so that too much or too little taxes are not being pulled out of your paycheck.
If you’re paying too little in taxes it could result in a fine along with having to pay additional taxes when you file your documents.
If you’re paying too much in taxes your losing out on the potential to put those earnings into an interest-yielding savings account or investments.
You could also use the additional money to pay off your debts sooner which will save you money by paying less interest.
Even though we all enjoy receiving a check from the IRS, that money was your’s all along so you should take advantage of it.
7. Evaluate Your Health Insurance and Employer Options
Do you have the right insurance plan based on how often you frequent the doctor.
You may be able to improve your finances by switching your insurance plan to something that matches your health needs.
Typically, the higher the premium you pay the lower the deductible and the more benefits you’ll receive.
The premium is your monthly insurance payment and your deductible is the amount you have to pay out-of-pocket before insurance begins to cover costs.
This is a basic definition as every plan can be very different.
But, if you don’t need medical services often it may be better to have a lower premium and a higher deductible.
This also may allow you to open a Health Savings Account which allows save money for health-related expenses for those out-of-pocket costs.
If you do expect to incur a lot of health expenses (like having children) it may be better to pay a higher premium to receive a lower deductible.
It’s all about choosing the plan that best covers your health needs and is the most affordable.
8. Create a Debt Overview
Are you feeling overwhelmed by your debt?
Even if you’re not, creating an overview of your different forms of debt and important details can help you manage your loans and credits.
The more information you have about your finances, the better.
You can instantly improve your finances by having the information to make the best financial decisions.
9. Create a Financial Overview
If you’ve created all the other personal
You want to include the most important information about your personal finances.
10. Research Tax-Advantaged Accounts
Does your employer offer a 401(k)?
If so, does the company offer a contribution match to the 401(k)?
Some employers who offer a 401(k) will match a portion of your contribution to your 401(k) retirement plan.
Essentially, it’s a reward for saving for your retirement.
Additionally, the 401(k) plan as well as traditional and Roth individual retirement accounts (IRAs) offer tax advantages now or in the future.
If you’re not using these types of tax-advantaged accounts, you should do some research into which may work best for your situation.
11. Write Financial Goals for 5 Years
Where do you want to be financially?
Maybe you want to have purchased a home.
Or, be saving for your children’s college fund.
Maybe you even want to be financially independent.
You can improve your finances right now by setting goals for five years from now.
How is that so?
It’s all about your mindset.
Runners train while thinking about their goal of setting a personal record in their upcoming marathon.
It’s the same thinking in personal finance.
It’s easier to stay motivated and disciplined when you know what you’re working towards.
12. Create a Plan to Pay Off D ebts
If you’ve created a debt overview the next step is to create a plan to pay off your debts.
You want to create a plan to pay off your debts so that you can spend the least amount possible paying off your debt.
If you’re just paying off your debts randomly, you may be wasting money.
13. Research Ways to Improve Your Long-Term Income
While there a ways to make a few extra bucks (literally) by doing surveys or watching videos, it doesn’t really improve your finances now or in the future.
But, if you feel like you need to earn more money, do some research on educational opportunities that will increase your earnings or employment opportunities.
Career Cast has some of the most in-demand jobs.
14. Check Your Asset Allocation
If you have investments, you have an asset allocation.
When is the last time you checked what your allocation?
Maybe, you’re fully in stocks when you should be investing in some bonds too.
Or, maybe all you have is bonds and you should be investing in stocks.
In addition to checking your overall asset allocation you may want to consider rebalancing your allocation.
As your investments move up and down, your original allocations go out of balance.
If your account is managed by a financial advisor or 401(k) plan administrator then your investments are likely already being rebalanced.
But, if you’re managing your own accounts, your investment allocations may need rebalancing.
15. Evaluate Your Bank Accounts
Are your banks working for your deposits?
As technology has advanced, banking has become a commodity service.
Almost all large banks offer variations of similar services and many online banks are popping up with equally robust offerings.
You may be able to improve your finances simply by moving your savings and even your checking deposits to a new bank that offers higher-yielding interest accounts.
A great website that compares different banks is bankrate.com.
We recommend writing down a list of all the banking services that you use so that way you can make sure any bank you open an account at offers those services too.
16. Consider Refinancing Debt
If you have debt you may be able to refinance the debt and save some money.
Typically, people refinance their loans to reduce the interest rate paid on the loan.
You can also change other terms of the loan like the length of repayment.
Just also be aware of how all of the terms of your loan may change.
When you refinance, you are taking out a new loan to pay off the old loan.
That new loan has its own rules and stipulations.
This is important for people who are refinancing their federal student loans.
Federal student loans carry certain features that are lost because you cannot take out new federal loans (from the government) to pay
You have to take out private loans (from a bank) to refinance and repay your federal student loans.
Final Thoughts
How many of these actions have you already done?
Are there more actions that you can do to improve your finances today?
We hope this list has helped you figure out some new ways for you to start improving your financial situation.
