It’s Never Too Late to Improve Your Personal Finance

Whether you are new to keeping track of your finances since you have gotten a job out of college, manage the family funds, or are working your way towards retirement, it is never too late to improve your personal finance.  Many of us do not keep a budget, which can be scary for the fact that we could not be imposing spending limits on ourselves and probably minimizing how much we are saving, never a good thing when it comes to saving for the all-important retirement years.

Get Spending Under Control

Really, the primary way to free up extra cash, especially if you’re already on tight on funds is to reduce spending.  A good way to see where your money is going is to review last month’s bank/credit card statement and go line by line reviewing what was a necessary monthly expense, what was spending money, and what probably could have been avoided.  One place that is typically easy to spend money on is eating out, due to the convenience, but has plenty of up charge.  If you can avoid eating out, do regular grocery shopping at eat your meals at home, you will see the savings pile up.

Maximize Savings

When it comes to saving, not only money each month, but to save for the future, automated, regular contributions are the way to go.  It is good to set up an emergency account to available cash on hand to avoid using a credit card for unexpected purchases, but beyond that, the focus really should be on saving for retirement.  Maximizing contributions to your work 401(k) account, whether it is a combination of increasing each year, or having employer matching, is where you will get the most out of saving for retirement.

Allocate Funds

A great way to ensure that you have the necessary funds going to the right places is to set a budget and allocate funds.  Trying setting a limit on spending, and well as setting aside money for food, gas, monthly expenses, and of course, saving.  Most Americans, two-thirds in fact, do not keep a household budget (or have tried and it failed and never continued), so it will take work and tweaking along the way, but anything to keep spending under control and maximize savings is worth trying to see if it is right for you.

Try Using Cash Instead of Credit

If you are having trouble keeping spending under control, whether it is on clothes, bars, or restaurants, try putting debit and credit cards away and just use cash.  Set aside how much you are “allowed” to spend each week and stick to that amount.  If you run out, you run out.  Dealing with cash could actually help reduce purchases, because when you use cards, especially credit cards with virtually endless credit limit, you lose that feeling of seeing money leave your account and go into the register, so using cash could at least help you think about completing a purchase.  If you are on the fence, think about it for a week or two and see if you still want the item.

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