Today is the day to improve your finances! TODAY!
Q: Why not yesterday? A: Obviously, yesterday has already passed. Q: Why not tomorrow? A. Why put off tomorrow what you can do today? Q. Why not start today, take a break, and then finish next month? A: Objection - compound question!
Why not . . . ? No more questions. The answer is: TODAY! This is my challenge to you: Do something to improve your finances TODAY.
I know that we’re all at different stages when it comes to finances. At the same time, I’m certain that we all have room for improvement - at least when it comes to managing finances.
For example, Amon and I just sat down and went over our monthly expenses. We go over our expenses each month, but we noticed something different this month: We saved so much money from being inside over these past few weeks! To be clear, I’m not saying that we’re ready to embrace the hermit lifestyle to cut down on expenses. BUT, I am saying maybe we were spending too much money eating out, traveling, and buying little knick-knacks here and there in previous months. In the future, maybe this is something we can improve on. SCRATCH THAT! Today, this is something we can improve on!
Today, Amon and I are going to go through our budget and identify areas that we’ve been overspending. We’ll update our budget AND we’ll stick to it.
How about you? What can you do today to begin improving your finances? I’ve got some suggestions. They’re simple and easy things and . . . you can do them today!
1. Create a Budget
If you’re serious about pursuing financial independence, you must create a budget. A budget is an important component to calculating your FIRE number (i.e., the amount of money you need to accumulate before you can reach financial independence and retire early). Not only that, but it will also help you identify potential areas that you may be overspending. I promise you - creating a budget does not need to be hard. Pull up old credit card statements online, look at your bank statements, review emails for past charges, look at old receipts, group your expenses into categories, and . . . there you go! Create a budget. Save more. Improve your finances. Check!
If you’ve already created a budget, points for you! But, why not take some time to go over your budget to make sure your expenses are aligned with your budget? Remember, a budget isn’t a static document that you create once, pat yourself on the back for creating it, and then quietly file it away somewhere between your expired To Do List and last year’s taxes. You should be consistently reviewing your budget and making changes as necessary. So - pull out that old budget, pop open a bottle of wine, and do some updating! #BudgetsOverWine #Winning
2. Set Up Automatic Bill Pay
Do yourself a favor and simplify your bill paying process by setting up automatic bill pay. By setting up your accounts to automatically pay your bills, you can eliminate late payments and late fees. Not only that, but some companies actually reward you for signing up for automatic bill pay. For example, did you know that if you automate your federal student loans, you get a 0.25% reduction on your interest rate?
It may not seem like a lot, but it adds up. Consider a $30,000 consolidated student loan at a 4.5% interest rate with a thirty year repayment plan. That equates to $24,722 in total interest on the loan. Take that same student loan amount, but reduce the interest rate by 0.25% because of automatic bill pay. The total interest collected on that loan would only be $23,129. That’s a savings of more than $1,500 just by switching to automatic bill pay!
3. Call Your Credit Card Companies and Ask For Lower Rates
Sunoa at Jordan’s basketball camp - Learning the importance of taking the shot.
Michael Jordan once said, “You miss 100% of the shots you don’t take.” If you have credit cards with high interest rates, take a shot and call your credit card companies to negotiate lower rates. A lower interest rate on your credit cards can speed up your ability to eliminate debt on your road to financial independence. All it takes is one simple call.
Couple of tips when negotiating: 1) Loyalty: Be sure to emphasize your history with the credit card company (they don’t want to lose you!); 2) Timeliness: If you make consistent and timely payments, make sure to bring that up; and 3) Competitors: Do some research and find out if there are other similar cards that offer lower interest rates - be sure to mention that!
And remember: The worst your credit card company can do is tell you no. BUT, they could also tell you yes! It’s worth a shot by at least asking. So, be a Jordan . . . and take some shots - metaphorically speaking, that is!
4. Make a Debt Plan
Here’s another debt related suggestion! I don’t know how you feel about debt, but ME: NOT a fan. I’m talking about “bad” debt: credit card debt, payday loan debt, loans from friends and family. If you have debt that you need to tackle, create a debt plan! You can do this with any type of debt - good debt, bad debt, all debt!
Write down all of your debt; list the creditor, amount owed, and the interest rate for each debt; write down your method and timeline for paying off each debt; and set mini-goals and track them. Studies show that we’re more likely to achieve our goals when we write them down and track our progress towards achieving them!
5. Watch Minimalism: A Documentary About Important Things
Finally, if you have a Netflix account, one of the easiest and simplest ways to improve your finances is to watch Minimalism: A Documentary About Important Things. Yes - I am recommending that you sit down and watch a seventy-eight minute movie on Netflix!