Big changes take commitment. And, this is why many people struggle when it comes to their finances.
But, what if we told you that you can overhaul your budget in a week? Although this takes more work than a couple of simple phone calls, taking a week to make changes to your money situation may be just what you need to ensure long-term financial security.
Since you have to start somewhere, here are 6 ways you can make drastic improvements in your finances over the course of a week.
Bring in More Money
You may have already sat down for an hour and developed a list of side gigs. Perhaps you even narrowed that list down and created a simple business plan. The next step is to see if your plan will work.
There are two ways to do this, and the first may depend on a financial commitment on your part.
To break it down, consider this important question: do you have to spend money to make money? In other words, do you need to invest in equipment, software, or space for your new business venture? If this is the case, you may need to do some market research before you are stuck with expenses. Locate your target market and start asking questions. Try to zero in on the types of customers who will pay for your expertise and then determine how much you can reasonably charge for your services or products.
If you don’t need to come up with money or if there are minimal costs needed to start your business, you can start marketing your services or wares right away. To do this, find a couple of trial clients, set fair pricing, and go for a test drive. Do you work faster than you thought? Slower than you imagined? Was the client happy? Are you happy? Find your groove and then spend a few days developing your pitch and your offerings. From there it’s time to actively seek out more clients and see if you can generate some extra income.
Make Extra Payments toward Your Debt
There are two types of debt: consumer debt and leverage debt. Consumer debt is anything that costs you money. So, for example, if you have credit cards, a home mortgage, student loans or an auto loan, you have consumer debt. Leverage debt is when someone else is paying the bill. For instance, do you have a loan on a rental property where the tenant is paying rent? If that rent covers more than the cost of the loan and you’re making money, you are leveraging that debt.
For the most part, you don’t want consumer debt. Anything costing you money is a drain on your finances – especially if you’re dealing with paying high-interest rates.
By saving more and improving your finances, you can develop a plan to reduce your consumer debt. Better yet, when you start making more money from your side gigs, you can start knocking down that debt even faster.
Take a Financial Course
If you’re lucky or savvy with your finances, you may not have much debt. But for those of us who can use a little help in this area, there are many courses you can take to improve your financial situation. Now is as good of a time as ever to broaden your financial knowledge.
Some courses will only take an hour, whereas others last for several weeks, depending on how in-depth the particular course is. To find the best course for you, do a little research online. One popular learning platform for personal finance courses is Coursera. You can also find classes at local community colleges and adult education centers. Once the class begins, take notes, read vigorously, and dedicate yourself to learning the new material.
Remember: the more you learn, the better off you’ll be. Along those lines, it’s ok to invest in a course that will hopefully help you improve your financial future.
Set up an Investment Account
Having a savings account is important as this is where you probably keep your emergency fund and save up for your short-term goals. However, you shouldn’t be putting all your money there. In fact, if you’re earning a mere one percent interest, you’re losing buying power over time due to inflation. Instead, think about diversifying your savings by opening an investment account.
Investing is a great way to see your money grow faster than inflation and ultimately build wealth. Because there are so many different types of accounts, it’s advisable to meet with a tax advisor or investment professional to help you decide what type of accounts are best for you.
Go on a Week-Long Spending Freeze
A great way to save more money is not to spend it! A 24-hour spending freeze will help, but if you splurge the day before and the day after, the effects are essentially negated.
Why not try a week-long spending freeze instead? If a week seems too long at first, try going on a weekend spending freeze. Surely you can give this a whirl by not going shopping or out for beers on a Friday night.
After you’ve conquered a weekend, try it for three days. Then four. Each time it will get a little easier to curb your spending enthusiasm. Once you get the hang of it, you can schedule your week-long spending freeze on a monthly basis and see if this results in more money in your bank account.
Dig in Deep and Make Improvements
Improving your financial situation is largely a matter of knowing what to do and putting a plan in place. By following some of the steps here, it’s now up to you to start making changes. Just think: by dedicating a week to earning and saving more money, you’ll be setting the wheels in motion to improving your finances for the long-term.
This page is for informational purposes only. Chime does not provide financial, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for financial, legal or accounting advice. You should consult your own financial, legal and accounting advisors before engaging in any transaction.