Check Your Bills Before Paying Them
The number one way to save money and spend smarter is to take the time to check your bills before you pay them. Bills tend to stick in your sock drawer, land in a pile on your desk, and land in your purse. But when it’s time to pay the bills, we tend to take a quick glance at the due date and pay the ones that are due first. But it shows us what the final bill will be. Does it make sense to use the same math from the previous months in the current month? Probably not. Take the time to sit down with your bills and take note of any changes or fluctuations in your utility bills. Look for any purchases you made that you can’t remember. Look for inconsistencies in your purchases and determine if you can find cheaper alternatives. Maybe you can remove someone from your cellphone plan that you don’t talk to very often. Look for recurring monthly payments to see what rates you have been given. Shop around for better rates. Make sure you are not paying more money than you have to. Sit down every month with your bills and make sure you are not overpaying and not getting the best rates.
Balance Your Checkbook Regularly
This action is so simple, but it is also so effective. A lot of people will get to the end of the month, or the end of the year, and realize that they never got around to balancing their checkbook. This is an easy task, and if you maintain the register at the end of each month, it should only take you a few minutes to balance it at the end of the year.
While balancing your checkbook doesn’t necessarily have to happen on a regular basis, it will certainly help you out at tax time.
This is true for both individuals and businesses. Properly balancing your book will make it easier to prepare your end-of-year tax form.
One quick service that banks offer to their customers is QuickBooks, which steadily monitors the account and keeps it balanced for you.
Check Investment Fees on Your Mutual Funds
If there’s any single thing you can do to improve your financial life, it’s checking the investment fees on your mutual funds for free. These fees can really add up over the years.
We’ve written a how-to guide detailing how you can check your investment fees for free on your mutual funds.
Who knows? Maybe you’ll be shocked at how much money you’re paying to someone else to manage your money.
Hesitate Before Purchasing and Ask Why
If you're like most Americans, you've probably purchased hundreds of dollars worth of things you didn't really need. As soon as you walk into the store, your mind defaults to the items on sale that "look" good.
Now, stop and think. Why are you buying the item? What need does it fill in your life? Does it serve a greater purpose beyond that of merely taking up space in your home? Then, ask yourself, can I afford it? If not, will I still buy it later when I can?
None of us really have unlimited funds. We all have a budget and a line on the amount of money we're willing to spend. However, you may need to let go of some of the smaller things to pay off the larger things.
A good rule of thumb: if the purchase is going to take you over your monthly budget, then it's probably not worth it. Not because you shouldn't buy it, but because it's a sign you have deeper problems with your spending.
Do you find yourself constantly needing a new TV for your bedroom? This is an example of life not being as good as you hoped it would be. Start working on the problem, instead of throwing large amounts of cash at it.
List out every purchase you make, no matter how small, and if you need to cut something out, then do it. Do it without guilt.
Commit Your Investment Strategy to Writing
When you have a written plan you will make consistent choices based on the same philosophy. You will be able to focus on enjoying the journey and always ask yourself where you are today in relation to your goals and how do you work towards them.
Develop a Written Investment Policy Statement
A written investment policy statement is simple, clear and straightforward. It is like a roadmap which will guide you towards your goals. It will help you understand why you are investing and will keep you focused on the big picture. Ultimately it will serve as a tool to keep you true to your desired philosophy, whichever it is.
After you’ve written your investment policy, you should make a habit of at least once a year reviewing it and updating it.
Change Your Life With 5-Minute Actions
Below you will find five action steps that will take you 5-minutes and will have a huge impact on your financial life. They don’t require a lot of work and they will definitely pay off in time. If you take action and make these small changes, we guarantee you will see improvement in your financial life.
Write it Down
The first step is to write down your income and your outgo. In order to really understand your financial situation, you need to take a look at how much you are making on an annual basis and how much money is being spent. Write down all of your income and outgo on a monthly basis. This will allow you to see exactly where your money is going and will also give you some time to think about where you could make some changes.
Make a Budget
After you have written down the income and expense, you have to take action and make changes. The absolute best way to start making changes is to create a budget. This doesn’t have to be formal and in-depth. Instead, create a simple spreadsheet or make a note on a piece of paper. After you have completed a budget, you will have a clearer picture of your financial situation.