Every so often, you need to go over your finances with the proverbial fine-tooth comb and find places where you can make small adjustments. Everyone’s budget changes over time in response to evolving demands and life events. Simple budget adjustments are prudent and beneficial, resulting in increased money for your savings as well as for spending. Freshening up your finances can be done several times a year and can become part of your overall budget management habits. The following are four ways to start on the path toward increased prosperity.
Sweat the Small Stuff
The smaller “incidental” types of spending you do on a regular basis may have more of an impact than you realize. Small, frequent purchases can add up and take a bite out of your budget. Such purchases can have you scratching your head, thinking “How did I ever spend that much?” Luckily, this area of spending is easy to adjust. First, you must keep track of your incidental spending. Every time you go to the convenience store and spend seven dollars on gum, coffee and a soda, jot it down in a small notebook or use a budget-tracking smartphone app. Seven dollars a day is nearly 200 dollars a month. When you eliminate this kind of unnecessary spending, you will free up some extra cash you can use to invest or put into savings. Another strategy is to budget a specific dollar amount per month to spend on incidentals and not exceed that spending limit. In months, you will have saved so much money!
Donate Your Unused Vehicles
Many people have an older or unused vehicle on their property. Donating a car to charity can bring a nice financial reward in the form of a tax write-off and so can donating a boat. Don’t allow your vehicles to take up space in your garage or yard if you are not planning on using them anytime soon. When you donate to a charity, you can feel good about your assets benefiting those in need. When you decide to donate a vehicle or boat, follow the step-by-step instructions and keep a paper trail of the documents involved for tax purpose.
Tend to Your “Rainy Day” Fund
The old adage of “saving for a rainy day” is still good advice. Saving for an unexpected expense such as a medical bill, a vehicle repair or an emergency trip can ease your mind. Your rainy day fund should also include enough money to cover basic bills for at least two months, in the case you or someone in your household loses their source of income. A good way to start a strong rainy day fund is to set aside a given amount in your monthly budget. Even if you don’t have much extra income to allocate, just 50 dollars a month can build your emergency money collection. Everyone knows “rainy days” do come, especially when you least expect it.
Consider Refinancing Your Home
If you are a homeowner, the process of refinancing may be a wise choice for you. Refinancing is the process of adjusting your debt by adjusting the terms of your loan. The adjustments are based on trends in the economy and other established factors. By refinancing your house, you can possibly save hundreds a month, depending on the specifics of your loan and the housing market in your geographic location. Hire an advisor to help you with the process of refinancing. You can often meet for a free consultation before deciding whether or not to go for it.
Positive saving and spending habits create a sense of financial freedom. When you invest time in reviewing your budget regularly, you can find the areas that quickly benefit from small adjustments. A series of small adjustments over time is what it takes to fine-tune your finances, giving you greater confidence and control over your money. Some families hire a financial expert to assist with this, but most people can successfully bring about change on their own. You may wish to purchase a basic guide to personal finances or read financial advice blogs for further information.
About the Author: Jolene Michaelson is a personal finance expert and a freelance writer.
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