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Worried about your finances - humble saversGlobal shares and government bond markets continue to react in strange and volatile ways because of the debt crisis in Europe. Many see this current volatility as the ‘new normal’ for the investment markets. Arguably this is a good thing if you are a day trader, but for the humble savers out there, this is a very unsettling time.

What can you do?

We should learn from what troubled governments are trying to do to fix their problems. It comes down to two simple issues:

  1. Reduce spending
  2. Increase revenue (For governments, this means increasing taxes).

The same thinking can easily apply to you. Here’s how:

1.    Reduce Spending

  • Your immediate goal – Make sure you spend less than you earn
  • Reduce debt as a priority – Start with the highest cost of debt, normally the credit card
  • Review your existing spending – Do you know where your money is going? Start writing down where your money is spent. These days there are simple programs and ‘apps’ to help
  • Start cutting out non essential spending – These are things that you ‘want’ as opposed to what you ‘need’
  • Reduce essential spending – Start shopping around for the best price, stop being so wasteful with food and pay more attention to your usage of electric , gas etc
  • Negotiate before you buy – Practice at this and you’ll save a substantial amount just by asking for a better deal.

The easiest way to make a positive start is to Save First, Spend Later (See also: Five Ways To Save – The Golden Rules) Adopting this technique will ensure you only spend what you can afford to spend

2.    Increase Revenue – Start Making More Money

Unfortunately, unlike governments, you can’t demand more revenue through raising taxes! However, you can better position yourself to gain some extra revenue.

  • Make the most of existing investments
    • Shop around to get better interest rates on your savings accounts
    • Seek better rates for your debts – mortgage, car loans and credit cards
    • Seek lower financial advice and product fees This can lead to a massive saving over time. (see also: Financial Adviser Fees – The Cold Hard Facts)
  • Make yourself a valuable commodity at work – Put yourself in the shoes of your boss and ask, “What would I like to see from my employees?” – It often boils down to the boss looking for more support, flexibility and the willingness for his/her employees to learn more skills. Become more valuable in your work place and it’s much easier to get that pay rise
  • Keep educated – Knowledge in your workplace is power. It is not all about getting the latest college qualifications, just simply keeping  abreast of what’s going on in the world will have a positive impact.
  • Be noticed (for the right reasons!) – These days, we are all on show. Whether it be Linked In, facebook, twitter etc. But don’t forget to get noticed more locally with key people and businesses associated with your industry/profession. Just make sure you are noticed for the right reasons, in other words be careful what appears alongside your name.
  • Healthy body leads to a healthy mind – It’s well recorded how the western world has become un-fit and this is costly in so many ways. Keep yourself fit and healthy and you’ll have the energy to do more with your life.

These are difficult times for many people. Being accountable to yourself for your personal finances and your career is not only a great first step, but something you should always strive to be get better at.

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