Finding yourself in a financial hole is never a lot of fun. You want to get out there and enjoy life but you don’t feel like you can because of your challenging situation.
However, turning your finances around is often easier than you think. While it takes dedication and effort, the right strategy will eventually pay off, sometimes in three months or less.
But what do you need to make yourself financially whole again? What strategies really work?
That’s the topic of this post. We look at some of the techniques you can use to transform your financial situation and achieve your best life.
Assess Your Current Financial Situation
The first step is to look at where you are now and ask what you can do, given your circumstances. You don’t have to become a millionaire overnight, just move in the right direction, one that suits you.
For example, you could start by tracking all your income and examining what comes in every month after taxes to see where you currently stand. There might be ways to increase your earnings, so it may make sense to look at these.
You could also create a spreadsheet tracking your income and expenses and ask where things might be going wrong for you. Sometimes, you might find yourself spending on things you didn’t think were important to you, but are.
Create A Detailed Budget
Once you’ve completed this audit, the next step is to review your budget and determine where you need to spend money. Usually, you can reduce costs more than you think.
Get rid of any unnecessary expenses when you can. If there’s something non-essential you’re spending money on that’s not serving you, look at how you might change this.
Look For Quick Wins
Next, look for quick wins. Can you do something right now to increase the flow of money into your account? One option, for example, might be to look at the possibility of getting government assistance. It might not be much, but it could be sufficient to tide you over and help you live a better life.
Another avenue to explore could be to go down a legal route. Using the Pathway injury firm to see whether your employer owes you money or if you can recover funds from another party’s insurance company is an excellent option. These payouts can be substantial and provide you with the boost you need to bounce back from physical injuries and put your finances on the right track.
Reevaluate Major Purchases
Another strategy is to ask whether you need to make any major purchases in the near future. For example, do you need to move house right now or is it something that can wait?
Sometimes, putting off purchases for a few months is okay. Yes, you might be desperate to take a vacation or spend money on a new TV, but it may not be necessary.
Where possible, you should also shop smart. Sometimes, waiting for opportunities is better than jumping right in and paying the full amount. Almost always, products and services will go on a discount, and that’s when you should strike. If you can postpone a little while, you can often save vast amounts of money, sometimes sums that are hard to imagine.
Pay Down High-Interest Debt
A top priority when trying to turn your finances around in three months or less is to pay down high-interest debt. Tackling this first is essential.
Start with the debts with the highest interest and then work your way down. Run through them one by one until you clear them out.
If necessary, transfer some of the debts into lower-interest accounts. This will significantly reduce your overall expenses, giving you more financial freedom in the future and better cash flow.
Once you start clearing your debts, you’ll find that doing so becomes much easier over time. At the start, things can feel tough. But as you progress, you’ll notice that the process transitions to a more effortless nature.
Automate Your Bills
Some people also find it helpful to automate their bills. Paying them automatically reduces the risk of late payments and other issues that can attract additional fees.
Bill automation can be done by setting up services like auto-pay. These tick over every month, like direct debits, allowing money to flow out of your account and make its way to utility providers and so on.
You should also consolidate your accounts where possible. Dumping everything into one big one can be an excellent way to track your progress and keep tabs on everything. Working out how much money you have is more challenging when you’re dealing with multiple accounts with sums flowing out of each of them.
Track Monthly Goals
You should also track your monthly goals, especially for the first few months. Reviewing progress weekly can be a highly effective strategy for holding yourself accountable and making sure you’re on the right track.
Which goals you track is essentially up to you. Most people focus on things like debt repayments and savings, but your metric of choice could be the money in your 401(k) or even the value of your property.
If you can see that you’re going off-track, try adjusting your approach. Plot a graph of your savings or net worth and ask whether it’s increasing the way you want over time.
Focus On Smart Investing
Lastly, focus on investing your money smartly. Make sure that it’s working for you all the time. Don’t be one of these people who is constantly living paycheck to paycheck. Seek ways to save now so that you have a nest egg to build on in the future.
If that means cutting back on your lifestyle, that’s okay. It’s only temporary. And once you’ve done it, you’ll have the satisfaction of knowing you can kick back and relax for a while if you want to.
So there you have it: some of the ways you can turn your finances around in just 3 months. Consistent action is what produces results.