Whether you’re trying to get out of debt, save for a major purchase or put money aside for retirement, reaching your money goals doesn’t have to be difficult. You just need a plan.

For more than a decade, I’ve been writing about money and helping people improve their financial health.

In this article, I’ll share seven simple ways to improve your finances. These are strategies that have helped me build net worth quickly after starting from zero. Let’s get to the tips!

1. Make a Budget and Track Your Spending

The first way to improve your finances is to create a monthly budget. I typically set aside about 15 minutes on the first day of the month or a few days before to plan my spending. If you’re just getting started with my personal Google Sheets budgeting method or another one that you like, it may take 30 minutes to get the hang of it.

After setting up an initial budget, I track every single purchase throughout the month. Immediately after I buy something, I log the transaction using a smartphone app. This takes only about five seconds per transaction, but it can be extremely eyeopening. Recording expenses in real-time helps me stop wasteful spending before it gets out of control.

I use the free Google Sheets monthly budget template to plan and track my spending. For a more in-depth look at my finances over a longer period of time, I log in to my Personal Capital account once a week for the net worth tracker and retirement planning tools. Personal Capital also has budgeting tools, but I don’t rely on them.

Tracking every expense from the Google Sheets app has changed my behavior and reduced spending more effectively than any other method. The budgeting charts that services like Personal Capital and Mint offer are great, but I think of them more like a report card on spending that already happened.

By checking in with my budget before making a purchase and logging that purchase immediately, I’m able to be very conscious about how I spend money. If I’ve maxed out spending in a particular category for the month, I either shuffle money from another category to cover it or don’t make the purchase.

To see how I create a monthly budget with Google Sheets, read this article or watch the step-by-step tutorial below:

2. Pay Off Your Credit Cards in Full

The second way to improve your finances is to pay off your credit cards in full every single month. Not only will you avoid interest charges, but you’ll also be giving your credit score a boost. That’s because payment history and amounts owed are the two most important factors in determining your FICO score, which is the most widely used score.

My FICO score has been above 800 since I was in my mid-20s. I’ve maintained an excellent credit score by paying off my credit card bills every single week, not just once a month. This strategy ensures that I never miss a payment and my credit utilization ratio is kept low, so lenders view me as less risky.

If you pay off your credit cards in full every month (or every week like I do), you’ll never be charged interest and can take advantage of credit card rewards. But I believe the impact of responsible credit card use on your credit score is even more valuable. A very good credit score (740 or higher) will help you secure better loan rates when you need access to credit for a major purchase like buying a home.


KEY TAKEAWAY: For anyone who’s in credit card debt at the moment, consider this strategy a goal for the future. In the meantime, put together a monthly budget and make a plan to tackle your credit card debt. If you consistently make payments on time and reduce the amounts owed, your credit score should gradually rise. I recommend Credit Karma to track your credit score for free.


3. Boost Your Retirement Savings

The best financial decision I ever made was investing for retirement starting in my early 20s. I remember not really being motivated to save for retirement because it seemed so far off, but I did it anyway.

The earlier that you start investing for retirement, the more time your money will have to grow. It’s that simple.

I’m not an investment professional and can’t provide that type of advice, but I can share with you the retirement savings strategy that I’ve used. By following these steps every year from my early 20s, I’m on track to retire early:

  1. Contribute to 401(k) up to the company match
  2. Max out a Roth IRA
  3. Go back to the 401(k) and contribute as much as possible

I invest no less than 15% of my annual salary, but for some years it has been much more. During a few years in my 20s, I was able to max out both the 401(k) and Roth IRA. This is all separate from a regular emergency fund.

If you’re new to investing, at least contribute up to your company’s 401(k) match. It’s part of your overall benefits package.


TIP: Personal Capital’s Retirement Planner is a free tool to see if you’re on track to retire. With this planner, simply input how much money you have invested and how much you plan to spend in retirement. From there, the tool generates a forecast that predicts whether your investment portfolio will support your goals.


4. Buy a House That You Can Afford

If you grew up “house poor,” you probably understand the importance of buying a home that you can afford. This is my fourth tip to improve your finances.

When you buy a place to live, you want to make sure that you’re not spending too much of your monthly income on the mortgage and other costs associated with homeownership. What’s the magic number? It’s hard to say. Some money experts believe that you should spend no more than 30% of your monthly gross income on housing costs, whether you rent or buy. But depending on your salary and where you live, this may not be a realistic number.

Instead of relying on a generic rule, go back to the first step and create a budget with all of your expense categories. That way, you’ll see what you have left after housing costs and you can make a proper determination.

For those who are taking out a mortgage, the lender will tell you how much you’ll likely be able to borrow during the preapproval process. But don’t take this number and run with it. The lender’s amount may be outside of your comfort zone. Focus on your budget and determine the monthly housing payment that you can afford. Remember to include property taxes, HOA dues, insurance and money for home repairs in your housing costs.

MY STORY: I’ve been through the process of buying a home several times. When I was in my mid-20s, I purchased a condo in Atlanta, Georgia, during the recession. I put 20% down to avoid PMI (private mortgage insurance), got a 15-year mortgage and paid it off in two years. After becoming mortgage-free, I was able to invest more aggressively and max out my 401(k) and Roth IRA.

You can read about the steps I followed to pay off my mortgage early or watch the video below:

My mortgage payoff story is an extreme example in today’s market. I won’t be paying off my current home in two years, but I’m still following the same steps to pay off my mortgage in less than 15 years. This is a reachable goal if you start by purchasing a home that’s within your means.

5. Stop Buying So Much Stuff You Don’t Need

As consumers, we’re bombarded with advertisements from retailers when we watch TV, drive down the highway and check our email. Most of these messages are from retailers who want us to buy, buy, buy.

The ability to recognize a want versus a need is a habit that I’ve mastered over time. I start by asking myself, “Is this a want or is this a need?” for all major purchases. Then, it goes something like this:

If it’s a need…

  • Do I have the money to buy it?
  • Is this a good value?

If the answer to those questions is yes, I make the purchase.

If it’s a want…

  • Can I afford it?
  • Does it have a purpose in my life?
  • Is it a good value?

For wants, the first two questions are most important to me. If it’s within my means and I feel like the major purchase will bring joy to myself or others, I’m likely to buy it.

If it’s also a good value, I’m likely to buy it without hesitation. Otherwise, I may delay the purchase and think it over for 24 hours.

Notice that I wrote “good value” and not “good deal.” Since I’m more focused on the quality (not quantity) of the things I buy, I often find myself purchasing items that are not the cheapest but are made to last.

I love a good deal as much as anyone, but an item is only a deal if it serves a purpose in your life.


TIP: The questions listed above have become a part of my routine, so I have them memorized by now. But if you’re just starting out, write them down on a piece of paper and keep it in your wallet for reference. You could also store your list using a notetaking app on your smartphone for on-the-go access.


6. Explore New Ways to Save Money

When’s the last time that you shopped for auto insurance, switched cell phone service providers, negotiated a lower bill or tried out an app that could save you a few extra bucks?

If you have an open mind and are curious about finding ways to stretch a dollar, you’ll probably save more money!

A lot of people sign up for a service and never think about switching to a cheaper competitor because they don’t comparison shop. Here are a few ideas to get started:

  1. Auto insurance: Every 12 to 18 months, call up two or three competitors and get quotes for the exact same coverage that you already have. You don’t have to wait until your policy renewal date to do this. Consider switching if you find a lower rate for the same coverage.
  2. Cell phone service: The next time you’re thinking about upgrading to a new device, compare cell phone service plans as well. All of the major networks (Verizon, AT&T and T-Mobile) have discount brands, prepaid brands and partnerships with other companies that offer low-cost service. You can keep the network that you already have and find a cheaper plan. (Related: Best Ways to Lower Your Cell Phone Bill)
  3. Cable TV: One month before your cable or satellite TV contract is set to expire, test out internet-based live TV streaming options. Hulu + Live TV, Sling TV and YouTube TV are three of my favorites. They all have free trials. You can test them all out and decide whether you can cut the cable TV cord at the end of your contract period. (Related: Best Ways to Lower Your Streaming TV Bill)

ACTION ITEM: Set aside one hour a month to explore ways to lower your monthly bills. You may want to do this on the same day that you create your budget. If you want some inspiration, sign up for my newsletter to get money-saving tips delivered to your inbox.


7. Create a Plan to Increase Your Income

After you’ve cut your expenses to focus on what really matters, you’ll have more money to put toward your financial goals. But frugalness only gets you so far. Increasing your income is the final way to improve your finances.

When I graduated from college in 2004 and started my first full-time job, I made only $10 an hour. After paying for my rent, food, insurance and other essentials, there wasn’t much money left to enjoy life. I was contractually obligated to stay with my employer for two years, so I knew that I wouldn’t be able to just quit and find a job that paid more. So I decided to spend those two years planning for a better future.

When my contract ended, I took another job and doubled my salary. A couple of years later, I got another raise. And a few years after that, I took a job that provided more money and opportunities for advancement.

While I worked my way up in my chosen profession, I also had a part-time job as a waiter. I typically worked only two shifts a week as a server, but it was fun and helped me set aside money to buy my first home.

My story is not unique. Millions of people are working a full-time job and a part-time job to make ends meet. But you don’t have to wait tables if you don’t want to. The gig economy has made it easier than ever before to find a side hustle, including work-from-home opportunities.

Here’s my advice: First, determine how much money you need to make every year to be comfortable. Then, make a plan for how and when you’ll get there. Be patient — it may require additional education or training.

If you’re thinking about taking on a side job in addition to your regular 40 hours a week, try to pursue something that interests you. Perhaps you can start your own business! If your side hustle is something that you enjoy, it won’t feel like work and you’ll get more than just a paycheck in return.

Final Thought

Improving your finances isn’t an overnight process. It requires a commitment to reducing your expenses, increasing your income and saving or investing whatever is left at the end of the month.

To track your progress, I recommend the net worth tools from Personal Capital or Mint. They’re free.

As you work toward improving your financial health, don’t forget to reward yourself along the way. Those rewards can be a great tool to motivate you to continue on your personal finance journey.


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