4 Ways to Change Your Finances for the Better

Finance is made out to be difficult, but it’s really not.   All financial advice really boils down to 2 sentences: “Spend less than you earn.  Save or invest the rest.”  Everything else is an unnecessary complication, unless you need to be told that commemorative plates aren’t actually an investment.   Unfortunately, we’re all people. (Except for you in the back.  I see you, and you are not people.)  People make mistakes.  People sometimes need things spelled out, or at least explained in a way that makes it seem less intimidating to get started.

With that in mind, here are four steps that will get you out of debt and, over a long enough timeline, make you rich:

1.  Lower your interest rates.  If you’ve got debt, particularly credit card debt, you’re paying too much interest.  It doesn’t matter what the interest rate is, it could be better.    It’s time to pick up the phone and politely ask your credit card company to lower your interest rate.  If they refuse, mention that their competitor is offering you 3% interest on a balance transfer with no transfer fee.    Mention a competitor by name, but don’t worry about a specific offer.   There are always offers being tossed about.

If they won’t lower your rate, find a company who will.   5% on a 10,000 balance is $500 per year.   That’s 3 months of payments for free.

2.  Lower your monthly payments.   Do you have a cable bill? A phone bill?  Any other bills?  Put them in a stack and call them.   Every. Single. One.  Ask if there is any way you can lower your bill.   Can you get put on a new customer promotion?   My electric company offers a saver switch for my air conditioner that will lower my bill by 15% just for giving them the ability to toggle my AC on and off.    When we had that installed, I never noticed it in use.

3.  Save $1000.   When you’ve got no money, every unexpected expense is an emergency.  When you’ve got a little bit socked away, you can ride out the problems without much worry.   $1000 may not be enough to ride out an extended bout of unemployment, but it does a pretty good job of taking the sting out of car repairs.   Do whatever you have to do, but get some money in an emergency fund.  Then, don’t touch it!

4.   Categorize wants and needs.  I want a vacation.  My kid needs braces.  I want a big screen TV.  My gas bill needs to get paid.  I want a new car.   My family needs food.  Are you sensing a theme?  Pay attention to what you spend.  Ask yourself if it’s something you need, or just something you really, really want.   Just the act of categorizing it can make it easier to avoid buying whatever it is.

5.  Use the savings from 1-4 to pay off whatever you owe.  Don’t blow your new-found savings on spinner rims or soap made from rich-people tallow.    Use it to finally get ahead of the game.

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    1. Those are great tips Jason. It is important to focus on places where you can get an easy, big win and use the extra cash to pay debt or invest for your future.

    2. Great tips! I’m always amazed how much you can save just be calling the companies you do business with and asking them for a lower rate. What’s the worst that could happen – they say no?

    3. Funny just last week I called my cell phone provider and shaved $40.00 a month off of my bill. It was so easy I took all that positive energy and called my cable company….saved $30 more. Seventy bucks a month folks, and I did not lose any quality in either service.

    4. I think you’re absolutely right. Put all the fancy methods and schemes aside until you can master those 4 things, and you’ll be on the right path.

    5. #1 and 2 are huge! So many people never bother to pick up the phone… and end up paying SO MUCH MORE as a result.

      We’ve only phoned our cable/internet service provider – and without hesitation they gave us 20% off of our services, for the next year.

    6. Sounds common sense to me and yet it’s so hard to figure out for some. Too many people are looking for some secret ingredient and quick scheme.

    7. Great tips! These all make sense to me. I’m not very good at picking up the phone and asking for a lower payment/rate/discount but I definitely want to become better at it!

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