Did you make a resolution or plan to start managing your finances? That’s a great choice, but… how do you start? How can you get on the right track with your money?
Thankfully, you are not alone and it will be an ever-changing relationship you will grow with your money.
Don’t be hard on yourself for what you haven’t accomplished, take a positive spin and think of what you will accomplish.
Got student loans, car loans, or mortgages? Or maybe you have something you want to save for, like a home, trip, or a new vehicle. Or is retirement something that concerns you?
No matter which of these questions you relate to, having a plan is vital to succeeding in your finances. We all want financial success, but if we don’t store up and plan for it, it is not likely to happen. If you don’t have goals, you won’t have direction, and that just leads to confusion.
When you want that shiny new phone or whatever tickles your fancy, think about what you were saving for to begin with. Which is more important? The phone or your future home? Asking yourself this when you cannot decide helps you stay on track to and meet your goal faster. Discover what is most important to you.
Make a list and put it somewhere that you will see every day. List your top goals and plans for saving. Doing this will motivate you and you can even track your progress with this list so you can see as you accomplish them.
Follow and Manage Expenses
To get a handle on your finances, you have to know where your money is going. It is hard to do much without this knowledge. You can’t read a map for directions if you can’t find where you are on it!
Keep an eye on your cash. Whether you are a consumer or a business selling web design in San Carlos Park, FL, you need to track your costs. Easy ways to do this is through spreadsheets, which you can get for free through Google, or other websites with a quick search. Sort your bills, separate the paid ones from unpaid bills in a file accordion. A good website for this is Mint.com they offer a ton of free tools for finances! You’ll need this information come tax time!
Balancing your checkbook can help with this. Not sure how? Start by picking a time everyday or night to enter all of your transactions from the day. This helps you keep track of what you have spent, you can also choose to do this weekly or monthly, but for most it is easier at the end of each day. Check your account statements, you can do this daily, weekly, monthly, or whatever works for you. Then compare it to what you wrote down in your register, this way you can check for any errors. As you check, look for any errors that you missed, something you forgot you paid, etc. Notice something that doesn’t belong? Double check it. If it is something you believe is in error discuss this with your bank.
Budget, and stick to it
Now that you know how to keep an eye on your cash, it is time you create a budget for the month for yourself or your entire family. This way you can keep your outflow of cash in line with your incoming cash. Don’t expect to make this budget permanent though, life is complicated, things change, and so will your budget.
Put all your costs together. Include your small and big bills, like your phone, internet, rent, car insurance, health insurance, etc. Then include the expense that change often, like dining, groceries, gas, single expenditures, and everyday items you buy as needed. Then add your expense for a savings and some money for you.
Total all your expenses, be sure that they are not higher than what you currently make! You want to always spend less than what you earn. This way you are not living paycheck to paycheck! Or worse, collecting a mountain of debt.
Quick overview of what to do:
- Determine what you make, before and after taxes.
- Figure out what your expenses are.
- Make a goal or several goals that are achievable.
- Categorize your budget. Then prioritize your bills and other expenses.
- Add up all your spending and bills.
- Find a way to keep track of how your money comes and goes.
- Create your ledger. (This is everything that was just mentioned. Basically, a business budget plan on paper. So put it all together!)
- Set aside money for each expense and total up your losses or gains.
Establish an Emergency Fund
Plan ahead for emergencies and create a fund for it. This way if your plumbing bursts, or you have a sick child, or need vehicle repairs, you have money set aside. That will make sure you are prepared for these unfortunate events.
Is there a certain amount you need to save? There is no magic number that you need to achieve, as it is ultimately up to you. Experts all have numbers to suggest, but everyone is different, so the same number doesn’t work for everyone. Save what you feel comfortable with or discuss a number with an advisor. Any amount is better than none at all, so you should just start somewhere.
Just Do it
I can spend a month telling you tips, but the best tip is just get up and do it! Go at your pace, no one else, focus on YOU. Don’t stress on how your friends save money or spend it. Following that route will just leave you frustrated and confused. Find what works for you. If it isn’t working, figure out what is the problem and correct.
You have to start somewhere, and it may not be where you want to be but that is why it is called a start! Push forward and you will eventually reach your goal as long as you stick with it! Ignore everyone else, and just keep focusing on you!
Don’t be afraid to ask for help
We all need help at times. Never be afraid to take the outstretched hand in front of you. You cannot be an expert in everything and maybe finance just isn’t your thing. That’s okay! There are tons of experts available to you if you just look! Getting help is nothing to be ashamed of and can make the difference you may need for your financial success.
About the Author:
Tasha Lachut has been a content writer for the past 7 years and is the owner of Your Creative Fairy, an online business to business service company. Her passion for educating businesses on their needs to grow flows through her writing. She has been featured in several print magazines as well as other online sources over her years of writing.