Let’s be honest, we’ve all had those moments where we’ve questioned if the way we’re handling our finances is really the best method.
Trying to get your financial life in order can be a challenge, especially when you compare your finances with others. Though it may seem impossible to have it all together, these five tips can help you get started on your journey towards a better future.
- Be honest with yourself and your money. Set realistic goals and track your progress every step of the way. Being honest with yourself will allow you to truly see how much you are saving or spending, which will help you make adjustments as needed.
- Find ways to save money. You can’t spend less than you make if you don’t find places to cut costs. Look for free or low-cost activities that will entertain you and your family, instead of going out for expensive dinners and entertainment options that cost more than what you are trying to save.
- Pay off high-interest debt. The interest rates on credit cards and other loans or lines of credit are typically higher than what is offered by a savings account or CD, so pay as much of your high-interest debt off as possible if you want to truly boost your overall financial situation.
Creating a budget
- First, take a look at your financial picture. List all of your debts (credit cards, student loans, etc.) and the interest rates you are paying. Are you paying more than 10% on anything? If so, consider refinancing it. Be sure to factor in any closing costs into the “new” rate you’re getting.
- The next step is to list your monthly income and expenses. Add up your expenses and subtract that from your income. What’s left over is how much money you have left to put towards debt each month. Make sure to include any irregular expenses like medical bills or home repairs in this calculation.
- Next, you need to create a monthly budget using the amount of money left over from your monthly income calculation. While this may seem tedious or overwhelming at first, once you have everything set up for the month, it will become easier. In fact, you will probably find yourself enjoying having a clear plan for your spending!