Are you living paycheck to paycheck? Do you feel like you never have money? Are you terrified that unexpected expenses will come up? Here are some ideas for getting your finances under control and feeling more in charge of your money. You can do it!
How to Take Control of Your Finances
#1. Evaluate Your Budget
If you don’t have a budget, make one! The best way to know where your money goes is to write it down and keep track. Always keep in mind that paying for your essentials (shelter, food, water, electric, etc.) should be first priority.
Related: The Budget Binder Kit is perfect for tracking every aspect of your finances.
#2. Trim the Fat
Once you know where your money is going, look at each line item and ask yourself if it’s necessary. If it IS a necessity, is it possible to make the payment smaller? Do your research and call your providers, assess everything from your cable/satellite and cell phone, home, health and auto insurance. You can even look into refinancing your mortgage and call to ask for discounts or change your plan. Meal planning is a great way to start spending less on groceries. Changing cell phone providers can give you amazing savings. If you have student loans, check into student loan forgiveness programs or income based repayment programs.
#3. Have an Emergency Fund
If you don’t have a savings account, open one! It’s best to have at least $1,000 saved. If you are starting from scratch, start with a goal of $500 in savings. This will keep you from using credit cards and racking up more debt when emergencies pop up.
#4. Become Debt Free
Examine your debt (student loans, credit cards, car payment, mortgage, etc.). Commit to paying off your loans starting with the highest interest rate. When creating your budget, think about throwing any extra money you have at your loans. If you can buckle down for a few years, you’ll be surprised how much money can be freed up by paying off debt. Your mortgage should be the last debt you pay off.
#5. Stick To It
This is the hardest part! Try using cash for a while, if you need a visual of your money leaving your hands. Talk to a trusted (financially capable) friend and have them hold you accountable to your budget. You might also want to read this post for ideas on how to stick to your budget.
If you’ve tried all these steps and still feel like you’re not in control, you may need to look into ways to earn more money (ask for a raise, look into part-time work or freelancing, etc.) or talk to a professional financial planner. Make sure you look into investing in your future, too (don’t forget about retirement!). Talk to people who are financially responsible and ask for advice. Taking control of your finances can be tough, but extremely rewarding.
If you’ve paid off debt, how did you do it? What was the one thing that really helped you to get it paid off? Let me know in the comments!