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Best Ways to Improve Personal Finances

Updated on July 14, 2011

Improved personal finances, good credit score, only good debts lead to better financial status which also improves our emotional, social, and overall health status whereas bad personal finances, bad credit score, and bad debts lead to worrisome financial condition adversely affecting our overall health, social life, and mental status. It is simple. For example if you are a rich man and have thousands of dollars in your pocket, your face will be red, you will complete social and financial tasks with confidence, you will buy everything you have desired. This is a perfect example of a rich man and the only reason he will earn more money with more confidence is just because he has money. Now take a look at a person who is eagerly waiting for a meager hundred dollars to come in his bank account as his monthly salary or whatever he has earned from his full-time job. In this situation, the money is utilized for paying off debts like car loans, home loans, personal loans, children education fees, electricity bills, home groceries and fruits, other utility bills, and many more things. The expenditures are far higher than the earnings and all the salary goes into expenditure per month leaving nothing in the hands of the poor man who is again waiting for the next salary check to arrive in his bank account. So now it is up to you, which life you want to live, life of a rich man with improved personal finances or life of a poor man with degraded personal finances.

It is for sure that everyone wants to live a healthy and wealthy life just because it makes him/her happy, confident, social, luxurious, or whatever you can say but there are several things to do before a person gets to live this type of life and below are those things and the best ways to improved personal finances:

Learn the best tips to improve your personal finances.
Learn the best tips to improve your personal finances.

Change your habits

Keep a good track of your personal finances and income. Take the help and/or services of financial experts to prepare a good financial planning program as this will help you develop a savings program improving your personal finances. You definitely need to incorporate a savings program in your monthly plans. I recommend you to put that plan in a place in your house where you can see it every day, right in front of your bed, in your toilet, in your drawing room where ever you can find it everyday.

Start Improving Your Credit History

Maintaining a good credit score with a low level of financial commitment would be ideal. Whatever your situation is if you have a high level of debt, you need to reduce it. It is very important to start paying your bills on time and in full. If you need a year to reduce your debts, stop looking for buying any type of high priced assets like, home, cars, etc. and give priority to planning your budget to accelerate the balance of those debts that are affecting your credit history. You should also immediately start a savings plan.

Hunting For Ways To Start Increasing Monthly Income

Income and income stability are other important factors for improved personal finances. If you want to get out of debt, become a rich man, start doing some part-time income. You need to lose something to gain something and this is for sure. What if I say you cut down on your leisure time, your ideal time, watching TV, meeting friends, playing video games, everything else where you have time for at least one to two years and start devoting that time towards creating part-time income or multiple streams of income. The best example is writing articles at hubpages. Start doing it if you have not done this till now, as it pays via multiple affiliate programs and you have nothing to lose and only to gain at hubpages.

Start Saving Your Increased Income

Now make a plan. For example if you earn 100 dollars from hubpages or any other online way of earnings after three months of joining, start using 50 dollars for paying your Internet connection bills and increased electricity bills due to increased computer use at home. Now what you have in hands is 50 dollars. Don’t put these 50 dollars in your savings bank account as you will spend it off. Go ahead and open a recurring deposit account for 50 dollars and start depositing 50 dollars on a monthly basis. When you reach towards 200 dollars, open another 50-dollar RD account and start saving. Again keep 50 dollars with yourself for increased expenses or family obligations at home. When you start earning more, keep on doing this. Whenever an FD matures, clear off some debt. For example if you have personal loan worth 2000 dollars, pay if off. Now you will have the money with you that you were paying the monthly installment from your account. Invest this money or use it. Opening a fixed deposit account is only an example. You can start savings with multiple other schemes available with the banks.

Cut Down On Your Extravagant Spending

Learn how to simplify your expenses. Check what you can do without luxuries to further increase your savings. Remember that your budget includes all your expenses in detail for every month, from what you pay for cable television services to your spending on mobile phones, caller IDs, books, laptops, computers, and music to mention a few. To further lower your level of incidental expenses, stop visiting malls on weekdays and go to discount stores or check out consignment stores if you need clothes and furniture. For most basic items, choose cheaper shopping and learn to compare prices. Incorporate money management skills like bargaining and negotiating while spending.

Close down several credit cards

If you have several credit cards, consolidate all of them in one or start paying off them one by one. Keep only one card at last and that also with the lowest interest rate. By doing this, you will be less tempted to buy and will also save more money on late fees and annual fees of credit cards.

According to me, above are a few ways to improve personal finances. I know there are several more and I would like you all to share them with us in the comment section below, so that every person who is going through the financial problems or has degraded personal finances can change the way he lives his life.

Improving personal finances is really important
Improving personal finances is really important | Source


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    • profile image


      9 years ago

      Great article on personal finances. I have looking for some good website for online personal finance management. I am trying so far so good.

    • soni2006 profile imageAUTHOR

      Rajinder Soni 

      9 years ago from New Delhi, India

      Thank you so much Ms. Smith.

    • anna.smith profile image


      9 years ago from Germany

      Really useful information Awesome hub..

    • soni2006 profile imageAUTHOR

      Rajinder Soni 

      9 years ago from New Delhi, India

      Thank you so much Simone and prairieprincess for your motivation. Yes I agree that it takes time to start paying off at hubpages but being consistent and having patience is the key to success here. You do that and the day will not be far away when money will start rolling in automatically for the years to come.

    • prairieprincess profile image

      Sharilee Swaity 

      9 years ago from Canada

      Good solid advice! I especially like the advice about writing on hubpages as a way to have some part time income. I know this will eventually pay off, although it does take some time to start paying off. Great hub!

    • Simone Smith profile image

      Simone Haruko Smith 

      9 years ago from San Francisco

      These are all great tips, soni2006! Thank you for sharing them!

    • soni2006 profile imageAUTHOR

      Rajinder Soni 

      9 years ago from New Delhi, India

      Thank you so much Loren. Same to you for the New Year. Yes I understand the problems with credit cards and benefits of not using them and also today as credit cards is the bonus topic, I will be publishing a few hubs on the same. Keep an eye on that as I need your feedback.

    • Loren's Gem profile image

      Loren's Gem 

      9 years ago from Istanbul, Turkey

      Great share Soni. Sometimes, saying "no" to credit cards is a difficult thing - but with self-discipline and determination, living a credit card-free life is in fact one of the best things anyone can do when it comes to improving personal finances.

      Best of luck for the new year! :-)

    • akirchner profile image

      Audrey Kirchner 

      9 years ago from Washington

      Thanks, Soni - and happy new year to you and yours, too!

    • soni2006 profile imageAUTHOR

      Rajinder Soni 

      9 years ago from New Delhi, India

      Hello friend, though it is not an official rule to post your hub links in the forum but if you do it is better. At least to grab some more traffic as most hubbers across the world have a eye on our hubs right now. Thanks for your comment and I wish you good luck for the contest. Also Happy New Year.

    • akirchner profile image

      Audrey Kirchner 

      9 years ago from Washington

      Great points, Soni - and good luck in the contest! You will do exceedingly well!! Are we supposed to be posting them into the forum too?

      We're off and running again - this time I'm using anything I make for getting my pup who's in the oven at the moment so hoping to make it to the finish line!

      Thanks so much for your kind comment!

    • soni2006 profile imageAUTHOR

      Rajinder Soni 

      9 years ago from New Delhi, India

      Thank you so much enlightenedsoul and always remember to make less use of credit cards when shopping. If you are able to make timely payments on your credit cards, then it is fine but if not, then always use debit cards or cash. Best of luck for the contest. I am sure you will win.

    • englightenedsoul profile image


      9 years ago

      Awesome hub. Really well written and very helpful. Bookmarking this ofcourse, afterall who would not want to improve his personal finances.

      Best of luck for the contest. This one surely one of the contenders to win!!


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