Do you want to stop living paycheck to paycheck? Or, stop worrying about running out of spending money before the end of the month?
Always scrambling to make ends meet is a stressful way to live. If you’re used to this scenario, life won’t get any easier if you don’t do anything about it. Living while on the brink of being broke is quite common, though.
53% of Canadians are living paycheque to paycheque these days. It’s not surprising that there are many online tips to help solve money problems. However, it can be quite confusing to choose the best approach. Don’t worry; we’ve got your back.
We’ve shortlisted nine of the most effective ways to improve your cash flow here. It’s time to stop being vulnerable to unforeseen events such as a car breakdown or a kitchen pipe leak.
1. Change Your Mindset
Getting out of your money problem starts with how you view it. Before you even begin handling your budget, you need to take the stress out of the equation. Doing so will allow you to become logical.
Think of money as a means to an end or a tool that helps you feel good. As you ease up this way, you’ll become more consistent in turning your life around. You’ll have the motivation to pursue the financial improvement you desire.
2. Jumpstart by Selling Stuff
Now that you’re more comfortable with how you view money, it’s time to get more flowing in. Start selling stuff that you no longer need. Old clothes, bags, and jewelry are good candidates.
Selling your old stuff will help train your subconscious mind. You’ll learn to focus only on what you need and not what you want.
If you have a spare room, you can rent it out. Your hobbies might help you to earn extra money, too.
3. Track Your Expenses
Tracking your expenses is the most convenient way of learning how to budget. It doesn’t call for outstanding mathematical skills since you only have to jot them down. Using expense tracking apps on your cellphone can make it even more convenient.
Once it becomes a habit, you’ll become more aware of how your money flows out. Being conscious of where your money goes can help you cut down on your expenses.
Your chances of breaking out of your bad money habits are better if you have someone to help you. Have your spouse or close friend hold you accountable so you can stay on track.
4. Give Your Credit Card a Rest
The convenience that a credit card offers is a double-edged sword. While it provides an easy way of paying, it can also cause you to accumulate debt.
The ideal approach is to stop using your credit cards altogether. The value of using cash for everything you buy makes you more conscious about your money.
However, not using your credit card is easier said than done. A simple approach is to make sure you already have money set aside before swiping it for anything.
5. Bonuses Are Not Part of Your Income
Don’t make company bonuses a part of your monthly budget. While they can spike the amount of money flowing in, these incentives are not a steady source.
Instead of relying on fluctuating extra income to cover your expenses, use it to pay off your debt. On the day you receive your tax refund, add it to your savings rather than buy a new gadget.
6. Stay Within Your Means
The easiest way to keep yourself from spending more than you earn is to stick with the necessities. Utility bills, food, and mortgage payments should always be part of your budget.
However, you’ll need to make sacrifices like skipping on expensive restaurants. On your next vacation, you can go with an Airbnb accommodation rather than a five-star hotel.
Canceling your Netflix subscription is a wise decision if you don’t have the time to watch anyway. You can also cancel your gym membership if you don’t follow a solid schedule.
7. Separate Your Savings
As you start to have extra money, transfer them to a separate bank account. The account should have accessibility restrictions for fund withdrawals. Doing so will keep you from using the money for trivial things.
We recommend getting interest-earning savings accounts from different financial institutions. A money market investment is a good option, too.
With your savings far from your reach, it will grow over time as you continue to put all your extra money into it. Once you start having money in the bank, you’re one step closer to breaking out of the vicious cycle.
8. Pay Off Your Debts
Aside from credit cards and mortgages, debt also comes in the forms of student loans and car payments.
The first step into paying off your debt is to stop taking new debt. If you adhere to the previous tips, you’ll be able to keep yourself from accruing more debt.
Debt consolidation can help you to interrupt your debt cycle. It allows you to pay off your credit card debts faster because of lower interest rates. Don’t be afraid to consider this route even if you have a bad credit mortgage.
9. Aim for Advanced Budgeting
A “pre-monthly” budget is a safety measure that will keep you from going back to your old habits. It’s about having money allocated for next month’s expenses. As your money in the bank grows, you can continue to move it further for up to two or three months in advance.
You can use this approach to motivate you to continue growing your funds. The goal is to have the money to support yourself even if you don’t work for a year.
Get Rid of Your Money Problems for Good
Following these tips can help you get out of the sinkhole. Best of all, solving your money problems is one way of achieving a stress-free life.
Are you ready to start the change? Your home is one of the best resources you have to kickstart your finances. Consider using your equity to consolidate your debt and get back on track.
Call us today toll-free at 1-877-383-1577 or apply online today to find out how you can put your equity to work for you!