A big part of changing your future for the better is creating small goals. If you’re stuck in a tough financial situation, sometimes it can seem like turning things around will be a long and bumpy road ahead. In fact, by setting short-term, achievable targets, you’ll find that financial stability is closer than you think.
Three months might seem like a short period, but you can make some serious changes in that time. Commit to some of these goals, and you should find yourself in a much better financial situation in just 90 days.
Change your spending behaviours
In our buy-now culture of convenience, it’s easy to get carried away with your spending. In fact, without really realising, you’ll probably have got into some bad spending habits. Acknowledging and changing these behaviours could save you hundreds over the month.
Once you come to the end of the month, take a moment to sit down and analyse your spending. If you haven’t been budgeting, it should be easy to find areas to cut back on, whether it’s the morning coffee, lunch spending or monthly subscriptions you don’t use.
Calculate your total monthly outgoings on luxury items and use that figure to motivate you to cut back. Over three months you should be able to develop better behaviours and become more considered in your spending, which should free up a significant chunk of money each month.
Automate your financial life
Forget three months, within a few minutes you can take key steps to optimise your financial discipline, all through the helpful tools of online banking.
Automation means getting your bank accounts and financial responsibilities working in sync with one another. Online banking technology allows you to merge accounts and schedule payments from one source to another. This means you can redirect incoming payday funds from your current account to your savings, as well as setting up regular payments for utility bills.
Essentially, this automatic redistribution of money means your sensible financial decisions take precedence over your impulse ones. Normally, you might be tempted to go on a spending spree on payday. If the money’s gone out before you can get your hands on it, you’ll be avoiding silly spending and doing yourself a huge favour in the long run.
Get out of debt
If you have debts hanging over your head, you may well be throwing at a little bit of money at them when you can or just ignoring them all together. Of course, it might make you feel better to forget about them, but they’re not going anywhere, so you’re best off doing something about them.
Often, paying off your debts can seem incredibly daunting and a long-term problem. However, developing an efficient debt strategy could help structure your repayments and motivate you to keep going until you’ve completely ridded yourself of your arrears.
Take a look at the ‘debt avalanche’ and ‘debt snowball’ techniques. Both of these methods are effective for steadily getting rid of your debt, but one may suit your situation more than the other.
In short, the ‘avalanche’ method focuses on your biggest and highest interest debts first. This will save you the most money in the long run by attacking high-interest debts initially before moving on to the smaller fry. The ‘snowball’ looks at knocking off the smallest debt first; the idea here is to offer you the satisfaction of clearing one of your debts quickly, which should give you the motivation to continue attacking the rest of your deficits.
Both methods require regular commitment but appeal to different mindsets, and utilising one of these, or indeed a combination of the two (the ‘debt blizzard’), could give you the focus you need to finally solve your worries. Depending on the level of your debt, three months of hard work could see you in the clear or at least well on the way to being in the black.
There are many ways to manage your finances, and these three methods are just a handful of short-term strategies that can help you out. Really, it comes down to what works for you. Whether that’s a quick fix or a long-term commitment, the most important thing is securing your financial future.