LITTLE FIXES, BIG RESULTS
Starting on the path to financial health can be overwhelming. But as you start paying attention to your money management techniques, you’ll notice that it’s not the big things as much as it is your small, daily decisions that truly impact your finances — for better or worse. In just an hour or two, you can complete a small task to make a big improvement in your financial situation.
1. DO WHAT YOU’VE BEEN DREADING
Often emotions win out in the struggle to wisely manage money, and negative feelings like shame or fear can make it seem easier to just avoid the financial tasks hanging over your head. Don’t give in to these emotions. Be proactive — the only thing that will actually make financial problems better is facing and fixing them.
If you have a financial task that you’ve been dreading and avoiding, like calling a collections agency that you owe or setting up a payment plan for back taxes, now’s the time to take care of it. Doing so will give you peace of mind and relief. But most importantly, it will give you the chance to directly address and handle any issues before they end up costing you even more money and stress.
2. SET UP AUTOMATIC SAVINGS TRANSFERS
If you set savings goals but can’t ever seem to stick to them, setting up automatic transfers to your savings account makes it easy and simple to stay on course. Figure out your savings purpose and goal — maybe you’re hoping to buy a car in a few months or want to step up your retirement contributions. Once you have a dollar amount for your total savings goal, calculate how much you’ll need to save each paycheck to reach it. Then use your bank’s online tools to set up a recurring transfer that moves money into your savings account as soon as you get paid.
3. PURGE RECURRING EXPENSES
If you’re paying for subscriptions to magazines you never read or pay more for your cable bill than you do for car insurance, it’s time to purge your recurring expenses. Spend about an hour reviewing recent expenses, keeping an eye out for monthly charges like cable bills and subscription fees as well as services you could do yourself, like housecleaning. Look for services you don’t use much or could live without and cancel them.
For services you need, contact your service provider ask if there are any current offers, promotions or discounts that you could take advantage of to secure a lower rate. Or, you could try and get an upgrade at the same price you’re currently paying. If you can’t get a deal from your current service provider, shop the competition to see if other companies are willing to offer a discount to give you a reason to switch over. The best part about cutting or lowering monthly expenses is that it’s a one-time effort that will help you save money long term.
4. CONTEST A FEE
If you’ve been slapped with a bank fee or other fee you don’t think is justified, speak up. Call your service provider and politely ask that the fee be waived. If it was charged in error, ask the company to correct the error — you might even be given a small discount as a consolation.
If the fee was legitimately levied, you can still request that the service provider waive the fee or lower it. If the fee is from your bank, for instance, maybe a bill payment went out a day before your paycheck was deposited resulting in an overdraft. Make sure to mention how excellent of a customer you usually are and how important this request is to you. Chances are good that retaining your business is worth waiving a $30 fee to your service provider.
6. MAKE AN EXTRA DEBT PAYMENT
If you’re in debt, whether you owe a high credit card balance, student loans, car loan or mortgage, making an extra payment will help you get a guaranteed return today. To make an extra payment, figure out how much extra you can afford, whether it’s $50, $100 or $500. Every bit can help you get ahead of interest and chip away at the principal of your loan or credit balance, which is the actual money you owe that is accruing interest.
Some personal finance experts recommend targeting your debt with the highest interest rate first, which would typically be a credit card balance. Submit the extra payment as you normally would through your bank’s online bill pay or you lender’s account management system. Next, start planning how you’ll make your next extra payment and get closer to owing zero.
7. GO ON A 24-HOUR SPENDING FAST
If you don’t think you have the extra funds to cover an additional loan payment or to save more money, try going on a 24-hour spending fast, making it your goal not to buy anything or spend any money that day. It might take some planning to arrange your day so you won’t need to spend money. Pack a lunch with what’s in your fridge, ask a coworker for a ride to work or stick with free water at the after-work happy hour.
Refraining from spending can make you aware of the triggers that prompt you to pull out your wallet, like driving past a coffee shop or getting invited out for lunch. By not spending, you can get a clearer picture of which expenses you truly need and which ones are simply bad habits you have formed.
8. CHECK YOUR CREDIT REPORT
You’re entitled to get a free copy of your credit reports once a year. If it’s been 12 months or more since you last reviewed your credit report, visit AnnualCreditReport.com to request free copies of your credit reports. All you have to do is fill out a short form, and once your information is verified, you’ll get access to an online copy of your report that you can also download and print out.
Review your reports to assess your payment history and look for errors. Credit report mistakes are actually fairly common; a Federal Trade Commission study found that one in four consumers have identified errors on their credit reports. Review all the credit accounts, loans and personal information listed in the credit report to ensure they are all your own because sometimes people find that their information has been confused with someone who has a similar name.
In addition, check for any negative marks like a late or missed payment that seems inaccurate. You can dispute any possible errors with the credit bureau and the lender that reported the information to the credit bureau, according to the Consumer Financial Protection Bureau.
9. SET A MONEY GOAL AND MAKE A PLAN
Some money goals involve doing some homework and require more than a day to achieve, but you need to get started. Use today to put your plan into action and get informed so that you are a step closer to accomplishing your financial goals. When you aren’t sure where to start, begin by researching your financial goal and obstacles you might encounter. With a simple search engine query, you can find articles and tools that can help you understand how to accomplish your goal.
For something like buying a home, for example, there could be several steps you need to take, such as improving your credit score, saving a down payment and maybe even trying to increase your salary so you will meet lenders’ income requirements. Once you have an overview of how to proceed, you can move on to the next step tomorrow.
10. FIND A BETTER INTEREST RATE
Whether it’s interest you’re earning or interest you’re paying, finding a more favorable rate will go a long way in moving your finances in the right direction. If it’s an interest rate on a loan or credit card, you can try simply asking for a lower rate. Credit card issuers will often lower your interest rate when asked.
For loans, many banks and credit unions will offer interest rate discounts if you set up direct payments or meet other requirements. Some lenders provide similar discounts to student loan borrowers.
You also want to make sure you’re getting a good rate on your deposits, like a savings account, money market account or even your checking account. By shopping around and comparing the annual percentage yields and dividends offered by different financial institutions, such as credit unions and online banks, you might find a better rate that will help your money grow faster.
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