Lifestyle Changes You Can Make Now for a Better Financial Future

If you’re feeling like your quality of life isn’t as great as you expected, there are changes you can make today to get back on track. Here are seven easy yet effective changes you can make now that will set you up for financial success later.

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Change 1: Get rid of your debt

Don’t let your debt continue to ruin your chance for financial stability. For instance, a lending platform in the Nordics called Saldo offers quick loans which could help you in an emergency. Once you have repaid the borrowed amount and got rid of the debt, it will again count toward your credit limit and you can withdraw further funds if necessary. When you pay off debt, you open yourself up to new opportunities to improve your quality of life like having a comfortable retirement, opening a business, buying a home, etc. Make getting out of debt the highest priority before you move on to any other steps.

Change 2: Have a savings goal

If you’ve had trouble saving money in the past, it could be because you didn’t have a well-defined goal for why you needed to save. Whether you’re ready to create an emergency fund or will need money for a future wedding, set a clear goal for how much money you need and how it will be used.

The most critical goal is to protect yourself against financial disruptions such as job loss or medical bills by having an emergency fund. Try to accrue at least six months’ worth of expenses and set it aside in a dedicated savings account. Once that’s funded, you can start to save for your next goal.

Set milestones to help you stay motivated and celebrate whenever you reach one. It’s hard work to achieve savings goals, so make sure you give yourself some kind of non-monetary reward for a job well done.

Change 3: Keep track of your finances

To have a stable financial future, you’ll need to know how much money you spend and what “leaks” may need to be plugged. Create a spreadsheet that lists all of the categories your expenses fall under and track every cent that leaves your bank account. This data will help you notice patterns and better prepare for significant yearly expenses such as taxes or insurance, so you can stay on top of your finances.

Change 4: Cut your expenses

If it feels like you come up short every month, then it’s time to start cutting expenses. Reach out to your regular billers such as your internet and cell phone service to see if there’s a more competitive rate they can offer or a new plan they can move you to. If they can’t lower your rate, start shopping around for other options like prepaid cell service or a different type of internet (cable, DSL, fiber, satellite, hotspots, etc.)

For utility bills such as gas, electric, or water, see if there are budget billing options. These plans typically look at your previous years’ statements and find an average that’s then used as the monthly amount owed. While you can expect your payment plan to update every year based on the previous years’ usage, it’s still a great way to stop having to pay fluctuating costs every month and get a better hold of your budget.

Change 5: Increase your income

If you can’t or won’t cut your expenses, then it’s time to look into increasing your income. Thanks to the internet, adding multiple streams of income is easier than ever. You can create passive income by offering digital e-book downloads, for example, or earn more money doing consulting or gig work.

If you increase your income while also decreasing your expenses, you’ll be able to speed up the time it takes to become financially stable. Once that extra money starts coming in, make it work for you by utilizing investments, and high-yield savings accounts to help increase your overall net worth.

Change 6: Don’t succumb to lifestyle creep

When you move into a higher earning class, you may feel the urge to adjust your lifestyle so that you’re keeping up with the Joneses. This is known as “lifestyle creep” and it is a dangerous way to use your new financial abundance. Lifestyle creep can cause you to increase the number of expenses you have with higher-end luxuries and more impulsive purchasing habits because you can “easily afford it.”

That doesn’t mean an increase in income has to keep you living a life of poverty—far from it. Just pay attention to how your spending habits shift and don’t let yourself fall into a cycle of debt or depleted savings.

Change 7: Stick to the plan

No matter what changes you make, it’s crucial that you stay the course and implement each strategy for the long term. Remember that you’re in this today to ensure a better quality of life in the future. Adjust your plan if things change, but never abandon it completely. That way, you’ll create good habits that create the financial freedom you want as quickly as possible.