When it comes to being in control of your finances, it doesn’t happen just from luck. Making wise decisions with your money means following a certain formula. There isn’t anything groundbreaking or new about how to stay on top of your money. The same tricks have been taught through the years and are tried and true and effective.
Instead of spinning your wheels and allowing yourself to simply accept your fate that you aren’t in control of your finances, take your wallet by the horns and decide that you want to take the steps that it takes to be financially free and intelligent. If you are willing to put in the work, look no further and do the following things.
Focus On Your Debts
If you have debts to pay off then the first thing that you should do with your incoming money is put it towards getting rid of these amounts due. A common mistake that many people make is spending their money first, then leaving whatever is leftover to pay their debts.
By focusing on paying off debts first, you may think that you are losing money. However, this is counterintuitive. By keeping your debts high you are spending more and more on interest and fees and paying more in the long run. Make sure that you focus on paying off your debts as a priority and you won’t regret it in the big picture.
Put Away Savings
People that make savings a priority always have something to lean on if an emergency or unexpected expense comes up. Make sure that you put away at least 10% of each paycheck and don’t touch that money for anything even though you might be tempted.
In addition to putting money into an emergency fund, it is also necessary to contribute to a retirement fund. People at a young age may not find it worthwhile, but it is essential to start saving now in order to prepare for the future. Beginning to save money now helps to ensure that you will have enough money saved when your retirement years arrive. This will allow you the freedom to enjoy your retirement days, whether you want to spend them peacefully in a well-facilitated community living for seniors or in an adventurous way traveling around the world.
If you don’t have a savings account yet, go to your bank and open one associated with your checking account. A savings account has more interest and a limited amount of withdrawals permitted within a certain frame of time. This way you are less encouraged to spend this money.
Make a Budget
If you’ve never used Excel or another spreadsheet program, you may want to start learning. A program like this can be invaluable when it comes to setting a spending budget for yourself. By creating guidelines for how you spend your money each month you will reduce the risk of spending frivolously on unnecessary expenses.
A budget doesn’t have to feel like something that is putting restrictions on yourself, but more like a tool in order to have more financial freedom. Knowledge is power, therefore knowing exactly where your money is going and setting boundaries, you can take the power back and be in total control of your spending habits.