For some of us, the thought of being in the cash positive come the end of the month is nothing more than a dream. All too often people struggle to make ends meet, even if they have a job and they appear to be in a solid state of financial health. With food to buy, a home to keep over your head and debts to pay off (or a kid!), it can seem like a never ending battle to get your finances back into shape (or into shape). This is why many people sadly choose to bury their heads in the sand rather than tackle any money issues head on. Don’t be one of these people. You can come up with a plan, regardless of how long it’ll take, and find a way to put that plan into action to improve your financial health!

Debts

If you have credit card debts or store cards, it’s important to try and clear this debt in a measured way. There is no point paying just the minimum amount allowed every month as you will only ever be paying the interest, instead of actually paying the debt down. Instead, focus on shifting some of the capital. The easiest way to do this is to find a credit card with zero per cent interest on balance transfers. Get yourself one of these, transfer your debts onto it, and begin paying back the core debt that you owe. Alternatively, you could obtain a loan (credit unions are great with low fees and rates) that will allow you to consolidate all of your debts, rather than seeing lots of little payments leave your account over the course of a month.

Task: Come up with a plan to eliminate your debt!

Check Your Accounts

Get your head out of the sand and take a look at where your money is. Some accounts are shockingly poor for interest on balances. Instead, consider swapping accounts. My online banks (American Express or CapitalOne) pay 10x what my big national bank pays. Moving money isn’t as much of a nuisance as it may seem, and can be worthwhile to maximize the return on your cash. If you have any offshore accounts, think carefully about their legality. It might be worthwhile investigating the Offshore Voluntary Disclosure Program (OVDP) to prevent you from falling under the burden of criminality should the accounts be a little shady. Withdraw your cash from these and get your money working in a safer and less risky way.

Task: Make sure your money is working hard for you

Budget

You must set yourself a budget that you can stick to going forward. Utilizing credit from now on is a definite no. You must live within your means even if this means foregoing some of the more expensive social activities that you partake in. You need to list every outgoing against your income and work out where you can shave off any expenditure. Do you really need that latte every morning on the way to work? You could save hundreds of dollars every year if you wait until you get into the office before making your coffee.

Task: Find and create a budget that you’ll actually stick with

Being financially healthy doesn’t necessarily mean having no debt whatsoever. You need to establish a relationship with credit that enables you to clear the balance at the end of every month, so you are no longer paying off the interest alone. Follow this guide and you can be financially healthy!

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