At the end of the month, do you habitually ask yourself where all the money has gone? You have steady, if unspectacular, income, and you don’t really spend a lot on frills. Surprisingly, it might only take a few small tweaks to improve your personal finances. Here are some tips:

Create a Budget

It’s very hard to improve your finances if you don’t know how much you’re earning and spending. One of things you learn from tracking your budget is that little expenses add up, a fact that many people choose to ignore.

Yes, budgets can direct your spending on the important items, but they can also reveal bad spending habits that are holding you back. If you find you can’t stop from spending “mad money” each month, then at least budget for it. It’s a great way to learn fiscal discipline, to take control of your financial life in order to improve it.


Personal finance software, such as Quicken and Mint, is ridiculously cheap compared to the functionality it provides. In case you are unfamiliar with these programs, they allow you to automatically record the activity in all your financial accounts, create and track budgets, let you pay bills online, and even point out unusual spending patterns. Because they are available as mobile apps, you can always know your financial status, tempering spontaneous decisions such as whether you can afford dinner at an expensive restaurant.

Making More Than the Minimum Payments on Debt

Minimum payments mean you’ll shell out maximum interest. It can take years, even decades, to pay off your credit cards if you pay only the minimum amount each month. You will improve your finances by paying down your debt, starting with your highest-interest accounts.

If you have several credit cards, first pay down the one with the highest annual percentage rate (APR), even if that means making minimum payments on your other cards. This will reduce your monthly interest expenses, and will, once you’ve repaid the balance, free up money to attack your remaining debt. If your cards all charge about the same APRs, pay down the one with the lowest balance first.

Boost Your Credit Scores

Paying down your debt by making higher-than-minimum payments will, over time, improve your credit scores. That’s important, because it allows you to replace high-APR credit sources with better, cheaper ones. If you have poor credit, you might be paying 29.9 percent on your credit cards. Raise you score to average, and you’ll likely cut your interest rate in half.

The more you improve your scores, the less interest you’ll pay, and the more access you’ll have to new credit, such as a car loan or a mortgage. Moreover, by improving your credit score you will put yourself in a better position to refinance your debt to lower interest rates. Did you know that most common types of consumer debt (ex. Credit cards, student loans, auto loans) can be refinanced to lower interest rates? You can put a dent in your debt faster, creating a positive feedback loop to a financially free life.

Beyond paying down your debt, improving your credit score requires that you make all your payments on time, avoid collections, foreclosure or bankruptcy, and remove any mistakes on your credit reports. You can order your reports from the three major credit bureaus at Annual Credit If you notice errors that hurt your credit score, you can communicate with the credit bureaus and the creditor to resolve or remove the problem, immediately sending your credit scores higher.

Pay with Cash

If you find that credit cards make it too easy to overspend, take them out of your wallet and use cash (or checks or a debit card) for your spending. Nothing concentrates the mind like staring at a low bank balance, but doing so helps you pay attention to the difference between required and discretionary spending. Besides, it’s hard to pay off your debt if you are constantly creating it anew. Using cash exclusively might seem Draconian, but it works, and it helps teach the value of a dollar.

Buy in Bulk

The big bulk stores, like Costco and Sam’s Warehouse, can save you a pretty penny on huge packages of life’s necessities: paper products, detergent, cheese, and thousands of other items. Buying in bulk saves you money and can be fun, as long as you have a place to store all those paper towels and toilet paper rolls.

Learn to Negotiate

Many people spend too much on their cell phones and cable TV contracts, because they fail to negotiate better deals. Providers would rather cut you a deal than lose you to a competitor, whereas you don’t need to be loyal to any particular provider.

You can use this asymmetry against providers by pointing to better deals in the marketplace. For example, a cable company might have a monopoly in your area, but you can choose to use a dish network instead. That’s a bargaining chip in your favor.

Cellular networks are constantly offering new and better deals, including ones in which another network buys out your contract, protecting you from departure penalties. The savings are there, it’s up to you to grab them.


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