How to get ahead financially – Upgrade your financial situation in 9 steps

Our lives are about balancing financial stability and enjoying life to the fullest, developing a career, and raising our family. It’s a constant struggle between spending and saving. If checking your bank accounts is a recurrent stress source, it’s time for you to change something. And if you feel you have fallen behind but don’t know how to get ahead financially, we are here to help.

But what financial decisions are first to take: start an emergency fund, pay off the debts and student loans, and build your retirement savings. Before consulting with your financial advisor, which is highly recommended, look at some advice on how to make financial progress from today.

One thing to remember before we see the tips for getting ahead financially. Don’t think about what you have had to save or achieve financially so far, given your age. There is no use in looking back and pondering on what you should have changed in the past. The best time to start thinking of your financial success is now. You can do it by looking into your credit scores, debts, consumer habits, and behavior and considering making short-term and long-term plans for financial stability.

How to get ahead financially – Best tips to get ahead financially.

Do not accept your current financial situation and want to go ahead these concrete steps will help you reach your financial goals and get ahead financially. 

● Review your current financial situation

● Set financial goals and milestones

● Develop your budgeting habits

● Apply the 50/30/20 golden budgeting rule 

● Keep track of your spending

● Pay down your debts

● Invest in yourself

● Create an emergency fund

● Bring in extra income

Let’s look at these in detail.

Financial health check 

First, you need to do a reality check and ask yourself How I am you doing financially. Review your current financial situation in detail to focus on priorities. If you need to start from a big minus, don’t panic. You may have to focus on eliminating the debts and finding a way to make a second income stream. Once you see where you are, you can reconsider your lifestyle, mindset, and consumer behavior and create a comprehensive financial plan. 

Set financial goals and milestones

Are you struggling to find the motivation to reach your financial goals? Do you dream of being able to save money regularly but have trouble sticking to it? It can take a lot of work to stay on track when saving for long-term goals.

Above all, it is very easy to lose focus and start spending money on purchases now rather than saving it for what you want to treat yourself later.

This is why building a precise financial plan is essential. Defining your dreams for the future is the best way to take control of your financial life. Having clear goals will give you a long-term view of your finances while allowing you to measure your progress and achieve (finally!) the financial success you deserve.

To be successful in saving for the long term, you need to know exactly why you want to save money.

Your savings goal can be related to purchasing a future home, launching a self-employed activity, planning a trip around the world or financing your emergency fund… Whatever the reasons you want to set aside, it is essential to have them identified to be effective.

Then, once you’ve set those goals, you’ll need to figure out how much money you’ll need to reach each goal. Ideally, it would help if you were as specific as possible to avoid unpleasant surprises.

Develop your budgeting habits

Managing a budget and saving money means being in the present and managing the future.

Since the desires are endless and the income necessarily limited, choices have to be made.

Contrary to popular belief, the budget is not a way to say “no” to yourself! Optimizing your budget is precise to avoid stupidly tightening your belt. It means favoring expenses that bring great satisfaction while minimizing others.

Better consumption also means having a predictable budget: paying monthly electricity, gas, and taxes to see things more clearly, for example.

And sometimes, starting to list expenses can reveal hidden spending habits that brought no satisfaction… with the key to unexpected and painless savings!

50/30/20 golden budgeting rule 

Saving money can be challenging. Even more so when inflation keeps rising. The 50-20-30 method allows you to establish a budget with balanced proportions: 50% for your current needs, 20% for your savings, and 30% for your desires. As you can see, this method of dividing your income into three categories is very easy to understand. And if this distribution is attractive on paper, is it effective? This is the question we will answer in this article.

Keep track of your spending.

One of the most basic rules of personal finance that everyone should follow is: to keep track of their money. 

There are tons of different budget spreadsheet templates you can use if you want to update your expenses this way manually. You don’t necessarily need to use them for budgeting, but templates cut much of the upfront work.

If you’re not thrilled with the ability to manually track your day-to-day spending and tend to use your debit or credit card to make purchases, then something like Personal Capital is a great solution. Apps like this help track your progress and see where you are at any moment.

Pay down your debts.

This will allow you to identify which loans or credit card debts cost you the most each month and over the long term. 

Then, keeping this in mind, feel free to return regularly to comparison sites to see if there are more attractive rates, in which case consider refinancing your debts. Start by settling small debts. Get rid of what’s easiest first by focusing on the accelerated repayment of your smallest debts. These generally require the least effort, and paying them will give you a boost of motivation to tackle the larger repayments. 

In addition, each less debt will result in more money to devote to the repayment of the others!

Invest in yourself

Never stop learning. First, train for free by reading all the possible articles on how to become financially independent. Become knowledgeable about how our economic and financial system works.

Consider investing in training to better master the field you want to get into. There are plenty of them online. If you aim to invest in crypto, Forex or other markets make sure to learn how these work and what are the opportunities.

This will save you time and energy and may save you a few problems (although investment is never free of some risk).

Stay curious, take an interest in books dealing with financial freedom, investing in the stock market, or in real estate.

For any person, the first reaction to facing the unknown is to feel anxiety. Go beyond it and get out of your comfort zone, regularly, even for small things that seem insignificant. It’s a real workout.

Create an emergency fund

This will be your emergency fund. You can call it “Contingency,” or “Security cushion “… if you like. The important thing is that the money you deposit there is only used in the event of a glitch.

Start saving and automate your savings account to avoid panic when a tile falls on your head. The idea is to have accumulated the equivalent of 3 months of expenses. It may take a while, but it has to start somewhere. 

In any case, it is not so much the amount that counts, but above all, the constancy of the savings. 

Saving regularly and knowing that you have some money set aside for emergencies reduces financial stress. It’s a matter of habit, and it allows you to stay focused on your short, medium, and long-term goals.

Bring in extra income.

Finding a good idea to generate additional income and get ahead financially can be your next step. Choosing the path of entrepreneurship obviously involves more risk than being content with your full-time job. It requires sacrifice. But once you have tasted the pleasure of being your boss, there is no going back.

Most of us need to be lucky enough to be able to give up our jobs to be able to embark on entrepreneurship. Indeed our financial obligations oblige us to keep a stable income. Developing a complementary activity becomes the solution to start doing business without risk. 

The creation of a micro-enterprise will be necessary to be able to launch your complementary activity. You have to find the side business idea that suits you best. Specifically, an idea aligned with your current budget, strengths, and skills. Indeed, this will allow you to take off your activity more quickly.

How to get ahead financially in your 20s

You can get ahead financially, no matter your age. However, to be honest, the sooner you start, the better chance you have to achieve your financial goals.

The truth is also that it’s normal to have financial struggles in your twenties. Balancing student loans, insurance, social life expenses, and rent can be daunting. That’s why many people in their 20s push major financial decisions for the future.

Two obvious solutions are therefore necessary to achieve financial goals more quickly: spend money less and earn more. 

And if you play it both ways at the same time, you’ll get ahead financially faster.

When you are in your twenties, you should manage to create an approx $5,200 emergency fund covering three months. In general, most of your efforts should be focused on savings. 

Also, starting to think about your retirement plan at your age is crucial. Better soon than later. Expect some 15 percent of your income to allocate to your retirement savings. 

How to earn more at that age? There are many possibilities: creating an additional income stream, giving tutoring lessons, finding seasonal employment during the summer, or finding a hustle in line with your competence that won’t take you too much time or effort.

How to get ahead financially starting from zero?

It is easier and faster to get ahead financially when you can invest and already have large sums of cash.

When you start from scratch, the most effective short-term milestone is to start by reducing expenses. 

Then, you can start with a side job (or side hustle, a profitable project next to your main occupation) to succeed in putting a few hundred euros aside every month, and why not reinvest part of it in one or more side businesses?

Even starting from scratch, with a clear objective and a well-planned roadmap, by reinvesting part of your additional income in assets such as real estate or side businesses, you can experience a snowball effect on your financial independence.