The end of the year with the holiday season might be overwhelming not only for you but also for your bank account. Thus it’s a good idea to use January and the New Year’s resolutions to change your spending habits and to become smarter with money. If you are lost and don’t know where to start, read our article. We bring you a list of 10 tips that will help you take control of your personal finances in 2020.
1. Track your finance
You need to know how much you spend each month and what you spend for. You need to know how much is left and thus can be saved or invested. Start using Spendee every day to get a better grip of your expenses.
2. Don’t buy things you don’t need
The easiest way to save money is to stop buying stuff you don’t need. We know that it could be hard with after-Christmas deals popping up from every corner. But you can do it! Think twice before you purchase anything and set a goal of not buying clothes, home decor, cosmetics and electronics for at least one month.
3. Bring lunch to work
Save money by cooking and bringing your lunch to work. Make a large meal for dinner and pack portion leftovers for lunch. Your bank account will thank you later.
4. Create an emergency fund
If you don’t have an emergency fund yet, we recommend to create it ASAP, because something can always go wrong.
According to personal finance experts, you should save from 3 to 6 months’ worth of living expenses for emergency purposes such as when you unexpectedly lose your job or you need to have your car repaired. Having an emergency fund will make your life less stressful for sure!
5. Save at least 10 % of your salary
When you already have a sufficient emergency fund, you can start saving for other items such as a summer vacation, a new car or a new phone. Dedicate some percentage of your salary and transfer it to your savings account. Ideally, create a virtual envelope at your savings account and watch the envelope getting fuller each month. Or you can also create a wallet in Spendee that will represent the savings envelope. Instead of adding expenses into this wallet, transfer your savings here and see how much money is being collected.
6. Transfer money automatically
To make saving effortless, automate it. You can do it either through your online banking and set up a regular transfer to your savings account or you can use external services such as Digit or Qapital. Digit analyzes your spending and based on the analysis it saves the optimal amount for you every day. Qapital helps you to reach your goals by saving your spare change.
7. Educate yourself
It’s never too late to get more understanding of personal finance. As podcasts are the new black, we give you our top 3 favorites to get you started on a journey to healthy finance and get more familiar with the finance world:
So Money with Farnoosh Torabi
Get finance inspiration from business minds, influencers, and financial guru Farnoosh itself. Listen and find out how to live a richer and happier life.
Popcorn finance
Short episodes explaining the basics of finance and sharing saving tips from money experts. For example, in episode 148 you learn about 1% rule that helps you to stop overspending.
The Dave Ramsey Show
Financial expert Dave Ramsey is giving callers money advice on how to get out of debt, how to save money and achieve financial peace.
8. Set SMART financial goals
Setting up SMART goals helps you to properly define your financial goals and make sure that you can actually reach them. Smart goals are specific, measurable, achievable, realistic and timely. Instead of generic goals such as “I want to save money” or “I want to make more money”, define each part of SMART. For example, define your goal as follows: “I want to save money for unexpected situations. By the end of 2020, I will save in my emergency fund 3 times of my monthly expenses. To do so, each month I can only spend $100 on Entertainment and $100 on Eating out.”
You can set up a Budget in Spendee to help you not to exceed your planned expenses.
9. Get the best saving and checking account
Can you still remember why have you chosen the banking provider you stick with at the moment? Are you sure there is no other bank offering better conditions? Maybe not, but still, it might be worth looking into. Ask your friends or/and Google what are the banks out there offering and get the best deal.
10. Generate two incomes
If you want to make more money in 2020, focus on your earnings. First of all, try to get a raise or promotion at your current job and discuss with your boss the possibilities of improving your skills. Second of all, get a side-hustle, generate passive income from real estate or shares or find a part-time job. Do not rely on one source of income.
