Sometimes, all that’s standing between you and ways to improve your finances is a small habit.
A little hack could be all that’s needed to boost your bank balance.
You might have heard the tip before, but you’ve never applied it, and so never reaped the rewards.
In this post, I want to give you 11 tips that will help you earn and save more – if you put them into practice.
Your New Year’s resolutions might have slipped, but there’s still plenty of ways to improve your finances this year.
1. Save An Emergency Fund
I’m always preaching the benefits of having cash in reserve.
But I bang on about it because having an emergency fund is vital.
Without a savings safety net, suddenly losing your job, being in an accident, or being hit with a large bill could put you into debt.
And once you’re in the red, it can be hard to claw your way back out as your debt grows with interest.
If you’ve not already got one, make 2021 the year you build an emergency fund.
Aim for at least three months of living expenses saved in a high-interest savings account.
2. Ask For A Raise
The thought of asking your boss for a raise might give you chills.
But if you’re an asset to your company and you can demonstrate the value you’ve created, then asking for a pay rise is totally acceptable.
Go into the negotiations prepared with examples of additional projects you’ve taken on, the areas of the business you’ve improved, or other ways you bring value to the company.
And also check what similar positions in different companies are paying.
If you’re being paid less and you’re a solid producer, then increasing your salary in line with other companies is justifiable.
You work hard, so make sure you’re paid what you’re worth.
3. Take Advantage Of Employee Benefits
While we’re talking about work, are you making the most of your employee benefits?
Your employer is already likely contributing to your pension, but there might be other perks of the job that you’re not aware of or taking full advantage of.
Many companies also offer health plans that could save you money on dental work, optician appointments, or medical bills.
And some are even more generous offering gym memberships, clothing discounts, money off vehicles, travel perks, and grants to buy bikes.
Benefits will be unique to your workplace – so you should speak to your HR department to check you’re getting all that you’re entitled to.
4. Try A No Spend Challenge
Making a game of not spending money can provide a quick boost to your savings. I
f vanilla lattes are your kryptonite, then you could try going for as many days as possible without your fix (and pocketing the savings).
Or if you want a real challenge, how about not spending on anything but the necessities for 30 days?
You could end up with a couple of hundred quid after a 30 day no spend challenge, which could pad out your emergency fund, or kick start your investing, or be used to…
5. Start A Side Hustle
A side hustle is one of the best ways to improve your finances as it creates extra income that can be used to reach other financial goals.
And there’s never been a better time to start a side business.
With so many of us now working from home, we have more spare time to get our own projects off the ground.
And there’s plenty of businesses that you can run from home. Here are just a couple of ideas:
- Freelancing (writing, graphic design, video editing, transcribing, data entry, voiceovers, social media management)
- Online teaching
- Ecommerce store
- Etsy shop
- Affiliate marketing
- Content creator (blog, YouTube, podcasts)
If you don’t know where to start, you can make some quick cash with online surveys while you figure it out.
6. Shop Around For Your Bills
Shopping around for your bills is a pain – and businesses know this.
Companies rarely reward their customers for loyalty because they know that once they’ve got you, you’re probably not going to bother shopping around. Despite the hassle, comparing the plan that you’re on with what’s on offer is a worthwhile task.
Switching to an introductory deal with another company that provides the same service could save you £20 / month or more.
If you manage to reduce your bills by £50 per month, that’s the equivalent of giving yourself a £600 wage increase!
Surely that’s worth a couple of hours of your time scanning comparison websites?
You can Join Bulb Energy for example and receive a £50 sign up bonus for you, and every subsequent friend you refer.
7. Create (And Stick To) A Budget
It’s another staple of personal finance I’ve talked endlessly about, but for good reason.
Without a budget, you’re blind to what’s coming in, what’s going out, and the potential savings you could make.
Whereas keeping track of your expenses brings awareness to your spending and can help you save more and pay off debt – you might be shocked at just how much buying your lunch at work every day is costing you.
Here’s my guide to creating a budget if you don’t already have one.
If you want to make budgeting effortless, use a budgeting app. My favourite is Emma.
8. Automate Your Finances
Becoming an automatic saver is, without doubt, one of the best ways to improve your finances.
And it’s super easy to do! Just set up a standing order to transfer your savings to a separate account as soon as you get paid.
Those savings should be used to build your emergency fund first, and then save for expenses on the horizon (wedding, car service, house maintenance, etc). After you’ve saved for the short term, your automatic savings can be used to build wealth and passive income – the fun part!
And again, automate your investing by setting up standing orders to buy investments or transfer money to your investing account.
9. Pay Off Bad Debt
Contrary to some other finance bloggers, I don’t believe you should pay off all debt.
Some debt is good and can be used to great advantage to build your wealth.
But bad debt – the kinda debt that takes money out of your pocket and keeps you up at night – has gotta go.
Car loans, payday loans, personal loans, and credit cards are all forms of bad debt that need to be cleared ASAP!
With these types of loans, not only do you have to repay what you borrowed, but you also have an additional bill to service every month in the form of interest – not cool.
So, let’s make this the year you banish bad debt from your life. Make a list of all your borrowings and use either the snowball or avalanche method to clear the debt.
Debt snowball – pay off the loan with the smallest balance first.
Advantage: getting a quick win builds momentum and keeps you motivated to pay the rest off fast.
Debt avalanche – pay off the loan with the highest interest first.
Advantage: makes more financial sense and will clear debt faster.
10. Improve Your Credit Rating
Lenders use your credit report to determine how likely you are to repay a loan based on your previous borrowings.
Scoring low on our credit report can affect your ability to get a mortgage, car loan, phone contract, or other finance.
And if you do get a loan, you’ll probably be on a higher interest rate.
So, improving your credit score is worthwhile as it both opens the door to financial products and lowers your monthly repayments.
There are lots of things you can do to improve your credit rating, but at a minimum, you should:
- Track your score
- Pay your bills on time
- Minimise credit applications
- And get on the electoral roll
11. Use Cashback Apps
Using cashback sites allows you to save on online purchases that you were going to make anyway – “going to make anyway” being the keywords.
Of course, the golden rule is not to buy anything that you weren’t planning to buy.
But things you routinely purchase – such as insurance, health supplements, and pet food – should be bought through cashback sites if possible. The savings for using cashback sites can be significant, or they might only be a dribble. Either way, it’s FREE MONEY.
Cashback sites worth checking out are:
- Swagbucks (you can also earn money from online surveys)
- Emma (budgeting app that offers cashback)
Wrapping It Up
The greatest savings are to be had by finding ways to hack your big money drainers: housing, travel, and food.
That’s the “secret” to saving 50% or more of your wage. But reducing these expenses isn’t always easy.
It often involves a big lifestyle change that many aren’t prepared to make.
Fortunately, there are still lots of ways to improve your finances that don’t require major sacrifice.
Everything on this list is doable, and if you were to apply a few of these tips (or even all of them), you could make this year the best year yet for your money.