From some people’s perspective, it would seem that saving money is a near impossible task now. Unless you are super rich, or entitled to every benefit under the sun, if you fall in that middle ground where you need to save money, but you either don’t earn enough, or can’t get any support, it just feels like you are financially treading water. This is when it’s time to start putting your brain into overdrive to see exactly what is going wrong. The answer could be very simple, but on the other hand, it could very well be a combination of factors that are impacting your ability to save or make money. Is your financial savviness due an overhaul?
Finding Out Why You’re Treading Water
When we earn a certain amount of money, which makes us not entitled to certain benefits or perks, the most frustrating part of it is that we are too rich to be entitled to anything, but also, not rich enough to be truly better off. And this is why we’ve got to start making alterations to our lives to ensure that we don’t tread water. As the cliché goes, we always live within our means. The modern-day means that credit cards are being thrown at us, which, to the untrained accountant, could very well do it as free money, with the added benefit of the card being interest-free for a certain amount of time.
The reality of the situation is that, even though we don’t have to pay it back right away, we need to pay off a certain expense right now. Whether this is an overdue water bill, or there are things that we deem essential, like petrol. But once we get into this mindset, this is where the slippery cycle of debt can get the better of us. But it’s learning how to identify the real culprits…
Is Your Home To Blame?
Our home can be a drainer of finances in so many ways. It could very well be due to the fact that we haven’t made appropriate renovations to the property so that we can save money on our heating bill, or it’s due to a larger issue, such as ploughing money into an extension; we’ve got to look at how our home is going to put us in the poor house eventually. Real estate is a worthy investment, but if there are issues at play that will drain us of our money over time, how can we fix these things? There are so many people that feel they’ve made a big mistake in buying a property. If this is a recent eventuality for you, and you only just got onto the property ladder after years of scrimping and saving, it may very well be a shock to the system to find that the property has to have numerous investments put back into it, not just to keep it up to code, but also to make sure that it’s a place that will stay valuable if you decide to sell up.
If you have a grand plan for what to do with your home between now and the time you decide to retire, there can be a few alterations that are worth thinking about. For example, rather than putting an extension onto the property, you could take advantage of one of the many granny flats available. This is a far more sensible investment and it gives you more control over the design and the layout. But in addition to this, it becomes an extension to the property without all that money being invested. Other investments to the property on more subtle, and can save you money over time. Keeping your home up to code in an environmental sense is definitely worth looking into, especially if you’ve got an old home that was originally a fixer-upper. If you haven’t insulated the property, and found that heat escapes, these are simple things for you to cut back on excessive bills.
Do You Need A Money Mindset?
But what if you feel you’ve covered everything? Is it down to the fact that you don’t have an appropriate mindset in which to make money? As we tend to live within our means, it could very well be a result of the money bubble you’ve put yourself in. We can see so many pieces of advice out there about how people got out of debt, by tackling certain methods, such as the debt snowball method, but they are useless if you don’t have the right mindset.
It’s not something worth beating yourself up about, because if you have struggled in the past, or there are new debts that you need to get out of, it can feel like an overwhelming tide that you just can’t swim away from. On paper, you may feel that you’ve got a well-paid job or the accoutrements associated with good living, but you still feel bound by debt. It’s not about the items you own that reflect your personality, but it’s how you choose to spend money. There’s a very simple way of checking this. All you have to do is go over your bank account statement, look at how much you spend in any given month, but do this in comparison to how much you really earn. If they are evenly matched you’ve got your answer! It’s at this point where you need to change your attitude to money. You can either choose to continue down the path you are on, or make appropriate steps to ensure that you living appropriately within your means. One approach that may prove to be a wake-up call would be to see if you can follow the 50/30/20 rule.
In essence, this is all about using your money (after tax) where 50% goes on your “needs,” such as the car payment, groceries, housing and utilities. 30% goes on your “wants,” like your hobbies and shopping, and 20% goes in savings. If you can follow this rule, it’s an automatic way to budget your life. The tricky bit is differentiating between your needs and wants. If you can follow this, you won’t go far wrong. In addition to this, there are apps you can use, such as Plum, which will use algorithms to help you tackle your budget, and even put money aside for you based on the information you provide. That way, if you really do think that you struggle to save money, you can always be surprised as to what can be put away, no matter how little it is. Mindset is all about altering your attitude to money and this isn’t just in terms of spending it, but it’s about seeing where the essential payments are in your life.
Is It Time To Diversify?
It seems that everybody has more than one job these days. Whether this is due to necessity, because they lived in an area of great expense, or due to personal dissatisfaction, many people are now performing more than one job. This is something that you can take inspiration from, not just so you can earn a bit of extra cash, but you can also get a bit more enjoyment out of this thing you do part-time. Naturally, we can all feel exhausted by the very nature going to work Monday to Friday but if you are struggling under the weight of your finances, getting some sort of side hustle or part-time endeavour could prove to be the answer.
Sometimes we need to find the right part-time job that suits our life. You may think about becoming a landlord, especially if there’s a spare room in your property, but if you are not so keen on this approach, you’ve got to find something that can earn you money, but without overexerting yourself. This may seem like an impossible task, but there are so many jobs that can be performed at home, online. Companies like Appen or Pactera provide work at home opportunities, and if you could find the right job, it’s something you could do on top of what you already do, and because they will pay you per task, this means that you are able to do it around your primary job, as well as around your lifestyle.
It’s Not Easy…
Living in the modern world means that’s there are constant stresses, and financial worries are, undoubtedly, at the top of the pile. If you find that you’re just hitting a wall, and whatever you’re doing isn’t resulting in any money been put aside, or there are a bunch of factors that are impacting you, it’s important to find out what these problems are, not just so you can minimise your debt right now, but begin to imbue yourself with habits and attitudes towards money that will potentially save your life. Money is one of those all the essential components, but while there are people like minimalists doing their best to avoid excessive expenditure, when we live a life that, at the very least, we’ve got to pay through the nose just to keep afloat, we’ve got to start putting our money saving abilities into overdrive.
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