Nine tips to tighten your financial belt
Anyone on the road to financial success - whether that's financial independence, becoming a billionaire or being debt-free - will have to tighten their financial belt at some stage. So, to make the process a little easier here are nine tips for the road ahead...
1. Know where you stand - The old adage of "You can't move forward until you know where you are" is still very true today. Unless you completely understand your financial position including incoming incomes, bank account balances, and outstanding debts trying to move forward will seem hard work at best.
Here's some items worth checking;
Income
- Wages/ Salary
- Government Payments
- Bank Interest
- Dividends
- Annuities
- Property rentals
- Board
Debts
- Store Credit Cards
- Outstanding Bills
- Credit Cards
- Hire Purchase Loans
- Mortgage
- Investment Loans
2. Make a plan - Start to envision where you want to be financially in the next 6, 12 and 24 months. Then take it out further to 5 and 10 years. Once you get a picture of what your are trying to achieve it's very easy to start setting some financial goals and making a plan.
As you set about putting the plan into practice you will notice either goals will be achieved earlier than expected or take much longer than you thought. So, build in some key times when you will sit down and readjust your plan accordingly.
3. Communicate with your creditors - If there is one thing that creditors hate it's being kept in the dark on how you're going to pay them back. Once you have a plan arrange a time to meet with them and explain what you're trying to achieve. Creditors will more likely be accommodating if they're informed than if they're trying to guess whether they will see their money from you or not.
4. Find areas to cut back - Tightening your financial belt whether it's because you have succumbed to some financial crisis through over committing yourself in debt, or changing employment or starting a new business is never an easy process.
Choices need to be made to live within your means. The weekly dinner outing with friends may need to go on the backburner for a time. No-Name brands may begin to adorn your kitchen pantry and you may have cancel that subscription to Cleo. Whatever it is, remember that it is only temporary until you get back on your feet again.
5. Barter - I know of some artists who have done deals with restaurants in exchange for pieces of art. Or chefs who have catered for functions in payment for bills. It doesn't seem that odd that if you have a skill or talent then someone else may be willing to provide their service in exchange.
Just like the proverbial washing the dishes in payment for a meal.
6. Earn extra money - There are no laws against earning extra dollars. Whether it be selling Tupperware, doing a paper round or selling lemonade on the pavement there are a myriad of opportunities that can add extra income to your family budget.
7. Ask for help - You are not the first person to ever be in the position of having to tighten your financial belt - and you won't be the last! In my experience, people are more than willing to help someone when they're in genuine need. Get over your pride issues and allow others to help you out. If you feel like you need to pay someone for it then pay it forward instead.
8. Use windfalls wisely - A windfall can be seen in two ways. Firstly, it can be the source of a suppressed spending spree (not to be advised) or it can be used wisely to further your position and hopefully release some pressure on that financial belt.
9. Focus on every success - When you start tightening your financial belt in order to get ahead it can become quite disheartening the longer the process takes. So, build in some rewards throughout your financial plan to celebrate the wins along the way. Don't make them outrageously expensive just little treats that will continually remind you that you're doing well.
Original list sourced from Making Bread by Gail Harlow and Elizabeth Lewin
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