It’s never too late for you to pay attention to your wealth and work to increase it. Money is a dynamic relationship that changes constantly. It should be positive. Instead of dwelling on what you haven’t done, adopt a positive outlook and be open to the possibility of taking action.
These are the most important, practical tips to keep in mind when you’re trying to turn a new leaf financially.
Keep track of your expenses
It is crucial to know where your money is going in order to manage your finances. It’s difficult to plan and move in the right direction if you don’t know where your money is at all. Before you can reach the finish, you must first know where you are starting. This is a huge financial goal. Get a tip to keep track of your money. You don’t have to track your expenses manually using a spreadsheet. Mint.com is a free tool that can be used for this purpose. Mint will ask for your account information and pull in your transactions to categorize them. Mint will then provide an easy-to-read summary of your spending, complete with attractive charts.
Make a budget
Once you have a habit of keeping track of your expenses, you can create and maintain a monthly budget. This is a way to keep track of your finances and provide a monthly check-in. You should plan to regularly update your budget so that you are aware of the reality of your financial situation. Your Actionable Tipp: Be sure to include all fixed expenses such as rent, car insurance and cell phone bills, as well your variable expenses like gas, personal care items and any one-time costs. Don’t forget to include your savings and the most important expense. Always pay yourself first. Add all your expenses together to ensure that your monthly income is not exceeded. Avoid spending more than you earn to avoid going into debt.
Goals, Goals and More Goals
Are you in any kind of debt? Are you looking to save money for something you really want, such as a house, a vacation, or a car? Are you looking to secure your retirement? Great! Financial success is dependent on setting goals. If you don’t have something tangible to work towards, it’s hard to keep good money management habits. When making financial decisions, keep your big goals in sight. You can make financial decisions that affect your cash flow, such as whether you should spend or save. Your Actionable Tipp: Make a list of the top 3 to 5 goals that you want to achieve and post it in places where people will see them: on your fridge or desk at work. You’ll be motivated each time you see them. You can also track your progress visually as you achieve these goals instead of writing them down.
Prioritize Your Values
Your values should guide your spending. Consider it this way: If you love traveling, you may skip getting a $60 haircut or $100 bag because they aren’t as important as your ability see the world. Instead, you can invest that money in your travel fund. When it comes to travel, financial success is based on the value of experiences rather than “stuff” such as material goods. If you want to do more with your money, you should consider changing your priorities. Are you spending more time with people you love or doing things that bring you lasting happiness?
Your Actionable Tipp: Make sure your money is where you value it. You can make a list of the most important things in your life and cut back on spending in those areas. This is possible by keeping track of your expenses. It might surprise you to discover that you are spending more on meals out than you think.
Initiate an Emergency Fund
For unexpected circumstances, like a car breakdown, a visit to the vet or doctor, or a costly home repair, emergency funds can be very useful. What amount should you save? It’s up to each individual. Your situation is unique and no one can give you advice. Experts say $1,000 is fine, especially if there are still debts. Some experts recommend 3 to 6 months of living expenses. If you are a freelancer, self employed in some capacity, or have a low income, it may be more. Your Actionable Tipp: Find what you are comfortable with and then go from there. It’s better to save something than nothing. Don’t worry if you have to start small. You can reach your goal faster than if you contribute $0 to an emergency fund by contributing $5 or $10 each week.
Personal Finance 101 – Take Action Now
These are only a few ideas to help you get started on the right financial journey. But that’s the key. The most important thing is to get started. When it comes to money, knowledge is power. Start slow and take it one step at a time. Keep your eyes on you. Do not focus on what other people are doing with their money. You will not get anywhere if you try to keep up with the Joneses. You can do what you like and tweak your methods if it doesn’t work. Although it may take some trial and error, we all start somewhere. Don’t be afraid of asking for help. While personal finance is simple in its fundamentals, money and making the right financial decisions can be complicated quickly. To find a financial advisor that can help you with your specific needs, visit our Find an Advisor page.