When money starts to get tight and your budget doesn’t stretch far enough, it can lead to lots of stress and anxiety. Yet if you play it smart and take a structured, forward-thinking approach to finances it is possible to not only move away from a hand-to-mouth existence but also turn a small savings pot into a healthy investment fund.
Whether you decide to investigate stocks and shares, invest in property or find an alternative passive income stream, the key is not to follow fads but instead to plan how you can make money work harder for you.
Read on to discover some simple steps to make your hard-earned cash work harder.
Talk to someone with a good grounding in financial planning
Before taking any further steps, it is fundamental to talk to someone with a successful financial history and, ideally, an ability to offer sound, balanced advice to you. Start by identifying someone who has done well with managing their finances and ask them questions about their step-by-step process. This individual could be a financial planner, or someone in your network. Either way, asking important questions can aid your personal financial strategy process.
Get rid of debt
Debts have the ability to quickly escalate beyond control, halting financial growth and ultimately trapping individuals in an endless cycle of earning and losing money. Getting rid of debt is therefore crucial when making your money go further. Start by paying off smaller debts and putting away any leftover income into savings. Do not take on any new debts, and eventually enough money will become available to pay off your larger debt. Though easier said than done, paying debt should be the first priority when looking to make your money work harder.
Create a budget
One of the best ways to take control of your finances is to set up a personal budget. It allows you to see your spending habits and quantify whether you are overspending. By spending less than you earn and tracking your ingoings and outgoings, you will ultimately save more money – money that you can then look to invest elsewhere. Engaging with your spending daily can help to eliminate bad financial habits, track expenses and help to draw up limits for different types of spending – whether that be on groceries, eating out or luxuries.
Investing your hard-earned cash is a fantastic long-term strategy that can help to build long-term wealth. There are multiple different options to invest and grow your money. Stocks is one of the most popular choices but can seem daunting for new investors. Newbies should invest in mutual or index funds as there is less risk and a good financial reward. Other options also include a high-yielding savings account and investing in real estate. Always be sure to choose a professional and reputable company to help you to manage property investments. Companies like Atlas Lane – DC Property Management will help to take care of the day-to-day running of your rentals, so you can concentrate on building your portfolio and not handling everyday tasks.
Develop additional income sources
Because of the power of the internet, it is now easier than ever to earn some extra cash every month – outside of your main source of income. Utilise your talents, such as content creation, writing or marketing and advertise your services online. To build savings quickly, put your passive income into a savings account and watch your finances improve dramatically.
Claim your tax credits
While everyone is required to pay their fair share of tax, there are often times when people are eligible for certain tax credits or tax relief that they are unaware of. This can be a straightforward and effective way of saving money.
Credit Card Rewards
With the ability to earn cash just by spending your money, credit card rewards are a great way to improve your finances. Reward cards are more effective when paid off every month, though avoid getting pulled into spending more to reap more rewards – as this encourages unnecessary spending.