How to improve your financial health

- Write out your monthly income and expenses

The first step to improving your finances has got to be to make an honest assessment of your current situation be it good or bad. Simply write out on a piece of paper or spreadsheet all of your fixed/variable expenses each month and your total income level. If you’ve got money left over then great but even if you do most people can benefit from the next step.

- Identify areas where you can save

After creating your income an expenditure list it will probably highlight some areas in which you are paying for something you never use like a gym membership, paying over the odds for your phone, TV or utilities etc, or wasting money on the little things like ice cream at $10.00 a time. A quick search online can help you find if there are better deals available on the things you’re paying for and it can best to allocate a fixed amount each week to small items and even use cash only to help you keep track of what you are spending.

- Use a fixed percentage of your income for debt repayment

If you have things like credit cards or loans outstanding which you are repaying each month, then after hopefully identifying some areas to save and freeing up some cash there is not much better use for that money than to increase your debt repayment. This has not only the benefit of getting you debt free faster but in most cases will also save your hundreds or even thousands in interest.

- Save a fixed percentage of your monthly income

A lot of people will probably argue that they don’t have enough money to save each month but if you don’t have a minimum of 6 months living expenses saved then this should be a top priority. The best way to tackle this is to make your monthly saving figure the first thing that comes out of your wages instead of trying to save if you have any left at the end of the month. A good benchmark figure can be to save 10% of your income and use 20% for debt repayment, living of the remaining 70%. If you don’t have any debts then save more!

- Invest in yourself

One thing which is often overlooked by people wanting to improve their finances is investing time and/or money in improving your skills to enable you to earn more. There are many evening courses available in a wide variety of subjects which could improve your skills and employ ability. Although spending several hundred dollars may seem expensive, the increased amount you could earn over your lifetime make education one of the best investments a person can make. Education is one of the best investments you can make!

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