Financial independence can be yours, according to money experts, if you just change a few bad habits.
Here are five ways to turn your financial future around.
1. Mind your budget, and stop keeping up with the Joneses.
Buying a new car because someone else has one, or buying a new suit to make an impression may not be the way to go, if that purchase can result in missed mortgage payments or being late with rent and utility payments.
Besides, the rich are getting richer and living more comfortably, according to a study released by Consumer Reports last month.
“While things have been improving for the wealthiest Americans for some time, lower-income families still have very little to be positive about,” noted Ed Farrell, a director of Survey Research at the Consumer Reports National Research Center.
The report explains that “the disparity in sentiment levels may be due to the fact that lower income households [under $50,000] have faced more pronounced and frequent financial troubles throughout the last two years.”
Faking’ it until you make it is a strategy that works best for teens. If you’re an adult, it’s time to take the real steps necessary to get your financial house in order.
2. Pay with cash.
If you’re a slave to impulse-buying, you should probably put your credit card away and only use cash, notes Ornella “Nelly” Grosz, author of the Moneylicious Book. “Pay with cash until you are able to control your spending. Ask yourself if you would pay for a particular item if you were paying cash rather than using your plastic card.”
3. Don’t shack up.
Let’s say you’re in a fabulous relationship, and he’s always at your spot. Doesn’t it make sense to live together to save money? Absolutely not, according to a recent Pew report, “Living Together, the Economics of Cohabitation.” Financial difficulty is in your future if you and your partner do not have college degrees, according to Pew researchers: “For the most educated, living as an unmarried couple typically is an economically productive way to combine two incomes and is a step toward marriage and childbearing. For adults without college degrees, cohabitation is more likely to be a parallel household arrangement to marriage — complete with children — but at a lower economic level than married adults enjoy.”
The report states that if children are involved, one of the partners will stay home to care for them, (i.e., to save on daycare) and may greatly decrease the couple’s income. Household costs will surge, the stay-at-home parent may not be able to help out with the bills?
Your Mr. Right may have some credit issues and bad spending habits that can also affect your bottom line. If there’s only one car, it will be used twice as much, but will the car note be shared? Will he help with minor repairs? Is there an agreement that he will repair any damage he’s caused?
Last but not least, if you break up as the girlfriend and not the wife, you are not legally protected. In other words, you’re not legally entitled to half of anything.
4. Become a savvy shopper.
If you like shiny new things, join the savings clubs that can help keep you out of the poorhouse, says Antoinette Peterson, aka Sister Save-A-Lot. “Sign up for daily deals. You know there are websites like groupon.com, livingsocial.com, dailydeals.com, twobucks.com. When it comes to these daily deal sites, there are very large discounts on on everything from groceries to manicures and dining out.
Sister Save-A-Lot adds one more golden rule: “Shop for clearances, whether it’s a grocery store or drug store like CVS, (most coupons that are not limited can be used for clearance items). Think about this, sale plus coupon equals free or inexpensive. Full price plus coupon equals full price in my book.”
5. Change your financial behaviors.
Bahiyah Shabazz of Shabazz Management Group advises shoppers to “Change their financial behavior. Create a weekly budget that includes all of your expenses and disposable income. Identify your spending triggers. Only use one major credit card for purchases. And set boundaries and surround yourself with a support system.”
Financial independence may be a hard road to take, but it is a mighty splendid thing. On the flipside, debt is the new slavery. Free yourself.