7 Tips For Reclaiming Your Finances
Are you stressed about paying bills? Feel like money comes in one second and goes out the next? Did you recently go through a big financial emergency and now have nothing left? Are you worried about your future financial situation?
Don’t worry, a lot of us have those same feelings at different points in our lives. The key towards getting over those hurtles is to actively work on our finances. You have to be strategic and persistent if you want to make money and keep it.
If you’ve ever worried about your finances, or you’re worrying about them now, here’s a short list of advice to help you along your way to better times. Head the advice, work on your finances, and never look back.
1. Create A Budget
The most important thing that anyone can be doing for their own finances is to create a budget. While businesses and the rich can hire people to do that for them, we are not so lucky. We have to put in the work for ourselves.
Creating a budget will help you to visualize how much you can afford to spend on any little thing. Make sure to cover the essentials first like rent, utilities, and groceries. After that, you can go on to the slightly lesser essential list like car and health insurance.
Then keep going down the list until you have the wants like entertainment and clothing money.
The hope is that once you have those figures written down, you can bring them up in your head when it’s time to pay for something. Imagine, you’re out with friends and they want to go to a mall. You all then walk into a clothing store. Think. Can you afford to buy a new shirt? How much clothing money did you budget for yourself? Not enough? Then don’t buy one.
2. Use Budgeting Apps/Resources
To help you out with making a budget, there are a plethora of resources available. For instance, Microsoft Excel, a widely used and purchased program, provides a few budgeting templates for free.
That said, there are several programs, which are made expressively for the purpose of helping people budget more. Two that I would recommend are Mint and You Need A Budget.
Mint is a program that’s best used for looking back. How much money did you spend in the last month? How much was spent on restaurants? How much did you spend at clothing stores?
Mint is mostly focused on giving you a good perspective on how you spend your money (past tense). Unfortunately, that means Mint doesn’t work great for people who want to plan for the future.
If you want a program that helps you plan for the future, you should look into You Need A Budget. You Need A Budget is one of, if not the, most recognized and celebrated budgeting programs out there today. The program goes out of it’s way to make budgeting easy and accessible. Plus, it really helps with that visualizing your wallet aspect.
That said, You Need A Budget costs a little over $80 annually while Mint is free. Really factor the prices in before picking a program, or do some research into other budgeting resources.
3. Live Within/Below Your Means
Once you have a budget, it’s important to stick to it. Don’t live outside your means. So, if you make $30,000 a year, don’t go around spending $31,000 a year.
It’s important that you become aware of how much money is going out and where it’s going out to. Are you spending money on Starbucks too frequently? Can you afford that Spotify Premium account?
If you’re reading this article up to this point, you probably need to get control of your finances. The biggest reason for that is most likely because you spend too much money. Fixing that will help to fix your finances.
Start spending less and saving more. While it’s not as fun as buying that new PlayStation game, it will start to feel nice every time you break into a new thousand dollars in your bank account. And that’s a gift that will keep giving.
4. Create An Emergency Fund
On top of that, it’s good to save money in case of any emergency. Life is hard and life can throw punches at any second. Give yourself a defensive edge with some proper savings.
Whether you get into an accident or develop some kind of illness, have some kind of emergency while traveling abroad, or something random like a tree falling down on your house or car, having savings to cover that will be a blessing.
Do your future self a favor and start saving 10-20% of each paycheck today.
5. Strategically Tackle Your Debt
But what if you’ve already developed a debt? That’s understandable as the majority of Americans (80%) are in the same situation.
No matter if you have $200 worth of credit card debt or $100,000 worth of student loan debt, debt is hard and terrible. Nobody likes it.
If you want your finances to get better though, you need to find a way to tackle your debt.
Finding a good plan and payback rate is one thing, and making sure to place those numbers into your budget is essential, but there are other routes too.
For instance, you can look into consolidating your debt. Possibly take out a loan with a lower APR to ensure that you can get rid of your credit card debt/student loans with high interest. From there, you can just merge the debt together and pay it off only once a month.
Of course, it’s important to strongly think over any changes like that to your payment plan, but that’s what I’m urging you to do in the first place. Think about your finances and your debt.
6. Understand Your Credit Report
On top of that, you have to be in touch with your credit score.
Credit touches many important things in life. Want a loan for a house? Need good credit. Want to rent in the city? Need good credit. Want to increase your credit card limit? Need good credit. Need a health procedure but don’t have enough money in the bank? Hope you have good credit.
While credit can lead to some bad financial decisions, it has also become a staple of our society. It’s important that you understand and keep up with your credit report. Otherwise, you’ll be kicking yourself later.
7. Research Financial Advice
Lastly, there is a plethora of financial advice out there that can get you going with controlling your finances. This article is just one of them.
If you want to start yourself down the journey of owning your finances, there are plenty of gurus and mentors out there to push you along.
Seek out websites like the Personal Finance subreddit on Reddit, read financial advice books like A Random Walk Down Wallstreet, and find advice from experts.
You are on the journey towards fixing your finances and finally getting in control of them. Being able to manage your money will ease so many other factors of your life, and you will thank yourself for the effort.
