Money might not buy happiness, but getting your personal finances in order will bring so much peace to your life. Money has a lot to do with mindset. If you ask anyone who has paid off a significant debt they’ll tell you feeling in control is everything.
Taking control over your finances means having the power to influence or direct your money into the direction you want. It won’t hurt if you take a minute, grab a pen, sit down and think about what do you want to achieve on a personal financial level. Then start taking steps, little by little.
Understand the Benefits
Once you feel like you have some control of your finances, you can more easily develop a strategic financial plan and achievable goals. It stands to reason that people who are financially successful are usually the ones who dedicate their time and energy to regular budgeting, in addition to managing and planning out their finances carefully. This requires a lot of discipline but the results are worth it! It’s rare that we are schooled in the ways of money management and financial education, yet it’s imperative to financial success. If you’re new to personal finance or simply looking for ways to expand your financial knowledge there are many great resources to start with.
Inspect Your Status Quo
The first thing you have to do is understand your situation in detail. This exercise should focus mainly on the following two major categories:
- Your incomes;
- The patterns of your expenditures.
You can take a medium-term period as a reference, and then extrapolate for the sake of the experiment. Multiply the deficit by some months to see your probable indebtedness, or multiply your surplus to see how much money will you save in between.
Name Your Financial Goals
The next thing you should do is write a list of specific short-term, mid-term, and long-term financial goals. These should comprise what you want to achieve in your life and for which of them you need money.
Finances can affect many different areas of your life, setting goals is the first step to planning where your money will go. Whether it be traveling the world or retiring early, listing your goals affects how you will plan your finances.
Set Your Priorities
Once you have summarized down your financial goals, you need to prioritize them. Prioritizing your financial goals ensures that you are paying attention to the ones that are of the utmost importance to you.
Invest Time in Your Financial Knowledge
Set aside 20 minutes a week towards reading about personal finance, according to your areas of interest. There’s no way you can learn everything about personal finance in one sitting. Reading about personal finance in small increments will make it easier to digest. Choose one topic per week, once you’ve read and got a thorough grasp and the topic you can move on to something else.
Experiment Different Financial Strategies
There are so many different of systems and programs out there to help you budget your monthly income and expenses, but you won’t know what works best for you until you give a few a shot! It could be that great new website you heard about or a good old fashioned excel spreadsheet, only you know what works for you.
Stick to Your Budget
Your budget is one of the most important tools to achieving financial success. Creating a thorough budget is a plan that allows you to focus your money in a way that will help you to reach your goals. A budget decides how and where you spend your money. Without a financial plan in place, you may spend your money on things that are not as important to you as your long-term goals.
Stop Paying Full Price for Anything
You would be surprised at how many deals are out there! For just about anything you buy on a day to day basis you can likely find a coupon, promo code or maybe an alternative option available. Once you start to realize all the different ways you save money on your various purchases, you’ll be surprised at how quickly your savings will build!
Make Your Savings Automatic
The best way to start saving more money is to set up automatic deposits. Creating a budget will help you figure out how much money you can realistically save each month, after covering all your bills and other expenses. From here you can then set up a direct deposit to a savings account. This is a great way to spare yourself the temptation of spending your extra money, and if you absolutely need to use your savings, you can access it easily.
Invest Your Spare Change
Ok. Now you are in control of your money. Ask yourself what is next. It makes sense to save all your spare change in a container at home, and periodically deposit it to your bank account. Don’t neglect this piece of advice. In your case, every cent counts. Then why not go one step further and invest that spare change! There are some great investing apps that will allow you to start investing for as low as $5! You can make those spare coins go even farther than you thought!
It may seem difficult at first to start implementing the steps to financial control, but it’s entirely worth it. Once you get rolling with gaining control of your finances the outcome is life changing. Not only will have achieved financial success and security, but you will also feel empowered about so many other areas of your life as well.