Your finances determine many important things in your life such as where you live, how you live, and what you’re able to do. So, it is very important that you get control of your finances. Here are some steps you can take today to start taking back control of your money and get on the path to creating wealth.
Start tracking your spending. The first step you need to take when taking control of your money is find out how you’re managing your finances right now. Where does your money come from and where does it go? You may be surprised to learn that how you think it’s being spent is often different than how it is actually spent.
To find out where your money is going, begin tracking it right now. Your tracking system can be as simple as a notebook page with columns, or you may want to set up a software program to help. Then write down all the money you spend as soon as you spend it. Don’t let guilt keep you from making entries. This step is meant to help you find out the truth about where your money goes, not judge your spending.
Set up a budget. If you don’t think you can follow a budget, think of it as a spending plan instead. To get your finances on track and start saving, you will need to spend less than you make. Write down where your money is coming from and on what dates you are paid. Then figure out how much of that money is spent on bills and other necessities. Write down how you will spend the remainder.
This is where you may realize you need to cut out some expenses so you can stay within your budget. Remember to plan ahead and put money aside for large purchases. Your needs will likely change every few months, so review your budget or spending plan regularly.
Start saving. The wealthy save a portion of their income so they can invest it and watch it grow. However, most of us aren’t accustomed to saving. We spend our money as quickly as we get it. To begin saving money today, contact your bank about arranging a regular automatic transfer from your account. Saving 10% of each paycheck is a good goal to strive for. While you’re getting used to the idea of saving, you may want to start out by saving 5% of each paycheck and build your way up.
Put away your credit cards. If you have your credit cards with you when you go shopping, you will probably use them. Eliminate your credit cards as an option by putting them away or even hiding them. If you remove them as a temptation, you will force yourself to live within your means by spending only the money in your bank account.
Ask your credit card companies for lower fees. Pick up the telephone and ask your credit card companies if they can work out a lower rate for your credit cards. Usually they will try to help you because it hurts both you and the credit card company if your debt goes to collectors. A lower rate means it will cost you less to carry the balance while you pay it off.
You can gain a lot more control over every aspect of your life once you control your finances. By following the above steps, you will be on the way to getting that control.