Much like the first pound is the hardest to lose, the first dollar is the hardest to save. The reason why? We have to force ourselves to actually begin - and to do that, we have to believe there's a real chance of success.
Today, we're going to discuss some of the fundamental aspects of any financial tuneup -with a focus on the kind of things you can pursue immediately. Most of these steps can be accomplished in around 24 hours.
Resolve To Take Action
The first step toward tuning up your finances is a mental one - you must galvanize yourself into action. This is often the most difficult hurdle to overcome, as taking action often requires facing some difficult situations. Many people, when faced with financial trouble, try to quarantine the problem from their lives, a kind of "out of sight, out of mind" solution. Yet this is the worst possible outcome. Unpaid bills or debt will fester like an infection, so resolving to break the chains of inertia is a critical first step in improving your finances.
Consider Budget Adjustments
As we grow older and make more money, we tend to spend that additional money rather than save it - a concept called "lifestyle inflation." The first step toward ending this cycle is a rigorous review of your monthly budget. Sit down with your bank statements and other financial records and identify places where you can trim the fat. Cable bills, gym memberships and software applications with rolling monthly charges are all easy candidates for the chopping block. Yet to make a significant difference, you may have to cut deeper.
Negotiate For A Better Deal
You don't necessarily have to cut an item entirely from your budget - there's always the possibility of landing a better deal via negotiation. Shop around for more competitive rates on insurance, loans and other significant financial expenditures. Be relentless in your search for a better deal - even relatively minor savings can add up to serious money when compounded over time.
Maximize Your New Savings
Freeing up money is just the first step; now that you've got the extra cash, it's important to determine what to do with it. Opening up an IRA, setting up automated transfers into your savings account, or increasing your 401k contribution are all smart ways to boost your bottom line. By making such payments automatic, you take willpower and follow-through out of the equation.
Review Your Credit Report
Any tuneup requires a diagnostic evaluation, and that's exactly the function your credit report serves. By closely reviewing your report from each of the three major credit reporting agencies, you can identify (and then contest) any possible inaccuracies. You can also compile of list of any derogatory information, then create a payment plan to help get your credit where it needs to be.
The first dollar saved may be the hardest one, but it's also the tipping point toward your ultimate success. By simply resolving to take several significant steps toward financial health in one day, you can set the table for extraordinary progress moving forward.