It is easy to say, “I will take control of my finances.” But it is actually hard to do. VERY HARD! You may start with good intentions, but the next thing you know, you are derailed and already drowning in debts.
Nobody wants to be struggling financially. This is why you have to be extra careful when making decisions. Whether you are looking into buying a new home or a vehicle, or perhaps you just want to make ends meet and get out of debts, here are excellent tips that will help ensure you’re on track:
To effectively control your finances, you must take ownership first. You need to assess your status and determine what your current position is. Do you have lots of loans that you need to pay? Are your credit card bills through the roof? Or, is your income too little?
Put simply, you have to accept whatever your standing at the moment is and let that be your challenge to do better when it comes to your finances.
Know Your Numbers
Before you budget your money, it is essential that you take a look at your numbers first. How much is your monthly income? How much money goes to food allowance, rent, insurance, and other expenses?
As you do this, you should be able to identify the amount that you spend on your needs versus your wants.
Set a Realistic Goal
Staying on track highly depends on what your financial goals are. Therefore, you have to think about what you are trying to achieve and make sure that it is realistic. Otherwise, you are just putting yourself into failure right from the start.
For instance, you want to buy a house within a year. You are earning $2000 a month, and your monthly expenses amount to $1800. And worse is, you don’t have any savings! You can easily tell that your plan is not feasible at all, except, of course, if you win the lottery.
The bottom line is, you should ensure that your goals are within your reach.
Make a Few Sacrifices
Alright, so looking at your numbers, did you end up negative? If so, then you really need to make a few sacrifices. Cross out your allowance for dining out as well as shopping for luxury items. Those can wait until you are back on track.
Reduce Your Monthly Bills
There are several things that you can do to reduce your monthly expenses. For example, to lower your electric bill, start being more responsible in using your appliances. Take note that small things can pile up, so you should never neglect them.
Pay Off Your Debts
Instead of buying non-essential items, start paying your debts, especially those that bear interests. The sooner you get done paying those, the better your finances will be.
Stop Using Your Credit Cards
Credit cards are a temptation. Period. You are buying things and services that you don’t have the money for. So you might as well cut those cards and wait until you have saved up some money to buy the things that you want. With this, you won’t have to worry about monthly bills, not to mention the interest charges and penalties if you don’t pay on time.
Like what we have said earlier, little things grow. So every month, no matter how small the amount is, you should put money towards your savings. Take one step at a time, and soon, you can achieve financial freedom.