As much as we may wish to deny it, money is everything. Without it, we don’t have a home, clothing, food, or security. When our finances are out of control, it can feel overwhelming, confusing, and even scary. It doesn’t have to feel that way, and it doesn’t have to be difficult to change. Here are five easy tips to take control of your finances.
Set some financial goals
Knowing how you want to spend your money is the first step to actively spending it that way. Setting goals, whether they include buying a house, paying off debt, or simply being able to pay cash for your car’s gas instead of using a credit card, gives you something to aim for. This makes it easier to save money, or to choose not to spend it on something that doesn’t move you closer to your goal.
Get your bills and debts in order
Paying your bills randomly as they come in is certainly one option. But this can lead to overdue payments, missed payments, and unexpectedly large payments. Instead, try getting your bills and debts in order. Write down all the bills and debts you owe – from gym memberships to cable bills to student loan debt. Prioritize which ones need to be paid (student loans) and which ones don’t. If you haven’t visited the gym since you paid the last annual membership fee, maybe it needs to go. Look for ways to minimize payments – maybe you can get rid of cable and use streaming options. Find options for automating payments. Then grab a calendar and mark down due dates and payment amounts so you can stay on top of things.
Track every penny
Write down every expense in a notebook that you carry everywhere. Use an app on your phone. Save every receipt. However you do it, track your spending. Regardless of how small the expense, and even if all you did was gather change from between the couch cushions, take note. This will help you see all the unnecessary spending you do, and make it easier to decide how you want to spend your money going forward.
Start an emergency fund
If your finances are out of control, you probably don’t have an emergency fund. But you are exactly who needs one. You need a savings account with a minimum of three to six months worth of expenses to get you through in case of job loss, severe injury, or other emergency.
Seek professional advice
If you still feel overwhelmed and like you’re struggling, seeing a professional such as a financial planner to help you figure out your finances or a therapist to help you figure out why you seem to consistently spend too much on clothes can help. Sometimes investing in just one meeting with someone can be enough to set you on the right path.
When your finances are out of control, it’s easy to feel like your entire life is out of control. Once you get your finances straightened out and in order, the rest of your life will likely begin to feel as though everything is smooth sailing.