3 Ways to Improve Your Home Finances in 2019

1. Set up an emergency fund

Experts recommend that most families set aside anywhere from six to nine months in living expenses that you can access should the need ever arise.

Statistically speaking, this means that a typical family should have in excess of $9,000 in this fund.

Do whatever you can to build up this fund; have a garage sale, put things up for sale online, work some overtime or get a second job…the important thing is to have money set aside for emergencies.


Because…Murphy’s Law.

If you decide that you’re going to get your home finances in order by paying off debt or saving for a home, you can pretty much guarantee that something will happen to throw you off your game.

But when you have an emergency fund set aside…even if it’s not fully funded yet…you’ll be in a much better place not only financially (because you can pay for the car repairs out of pocket instead of charging it) but emotionally as well.

In other words, you’ll be mentally ready to keep on working your plan when life throws you a curve ball.

2. Design a debt reduction plan

If you have no formal debt reduction plan in place it can feel like you’re swimming against the tide, never making any progress in reducing what you owe.

As a result, the stress from this feeling can often lead to binge spending or other negative behaviors that do nothing to help you tackle the problem.

Don’t let another year go by without taking the time to sit down and go through your debts and put together a detailed plan on how you’re going to tackle the debt.

Of course, this step assumes you’ve already created a budget that considers how much money you’re putting towards paying off your balances.

If you haven’t created your budget, begin with that before putting together your debt repayment plan.

To get the biggest emotional bang for your buck, go with a debt snowball. The feeling you get from paying off your first, smallest debt, will fuel your desire to pay the rest as quickly as possible.

3. Create an expense reduction plan

Have a new, higher paying job or get a raise but don’t feel like anything is different? If you’re like most of us, you’ve probably wondered what in the world happens to that extra money.

The technical term for the idea that “expenses always rise to meet income” is “Parkinson’s Law”, and yes, you’re not the only one who has experienced it.

The only real way to escape this fate is to purposely plan where your extra money will go, with the idea that it should go in either your emergency savings or be invested for your future.

Because as you’re probably already keenly aware if you don’t have a plan for the money, it will very easily find its way into your spending to disappear forever.

In addition to protecting yourself from the effects of “Parkinson’s Law,” it’s smart to take a look at your current expenses for ways you can cut costs.

A smart way to reduce expenses that can be done annually include:

  • ⬥ Call for better rates on services and products such as insurance or mobile phone plans.
  • ⬥ Get rid of any subscriptions that you don’t use – or could do without (e.g. apps, software, cable or satellite channels, gym memberships, etc.)
  • ⬥ Shop for better credit card rates (or even better, get rid of them entirely since you already have an emergency fund)

Don’t let another year go by without doing something about your home finances…just take one step at a time keeping the end goal in mind and you’ll be amazed at what happens.