The first step to taking charge of your finances is to take a reality check. Be honest with yourself. Ask yourself how much effort do you put into managing your own money? Do you keep track of what you spent in a day, week, or month? How many times do you regret spending so much money on something that will benefit you so little? Confront your demons. This means getting everything out in the open, including all liabilities, expenditures and all sources of income.
Now that you have got real about your current habits it's important to understand your "why" so that you are motivated to take the important steps and make the change. If you don’t know why you are making sacrifices and working so hard it will be easy to fail.
Someone who manages their finances responsibly has peace of mind and knows how to:
Pay their living expenses
Keep debts to a manageable level
Save for the extras that make life enjoyable
Avoid constant money anxiety
So it's important to track you’re spending and understand where your money is going.
It’s not how much you make, but what you do with what you've got. Proper money management does not involve a magic formula to find more money. It simply means getting the most from the money you do have.
Once you know what you have and where it’s going. Make a budget that incorporates your goals and ambitions. Revise your spending to facilitate making your goals into reality.
Once a year review your accounts, credit cards and utilities. Consider switching to providers with a better deal or ask your current provider to give you a discount to remain with them.
Be sure to include an emergency fund in your new budget. This will prevent you from living paycheque to paycheque and means that if and when something does go wrong you have the financial capacity to deal with it.
If you are currently in debt, make it a priority to get out of debt and reduce this burden on your future spending.
It’s also really important to plan for your future. Consider putting 10-15% of your salary into a pension plan or retirement fund.
Use technology to automate regular transactions and to automate your savings this will mean that you never forget to save or pay a bill. Direct debits with your bank are an easy way of doing this.
Boost your income by earning more money. Invest in yourself to help you gain a promotion, or develop new skills so that you can develop multiple streams of income.
Commit To Following Your Budget. It's one thing to make a budget. And it's another thing to make it work. The only way out of a financial rut is to do something different from what you've been doing.
By making a workable budget, and following it, you will be taking the first steps toward truly being in control of your financial future.
Members of The Singles Sisterhood can take charge of your finances today with our Investment and Pension Planning for Singles eCourse.