1. Begin by tracking your spending. This is the first vital step to take for taking control of your money; you will soon discover how you are realistically managing your finances right now. Do you know where your money comes from and specifically were it goes? Most know the first but not the second. After a couple of weeks of diligent tracking, you will be quite surprised to discover that how you thought you are spending your money is a bit (or vastly) different than the reality of how it is actually being spent.
Again, to discover how and where your money is being, start to track it now. The tracking system can be as simple as lined pages with columns, or a bit more sophisticated by using a software program. Either way, get the expenses systematically written down so you can start seeing trends. Doing this will bring out the reality of your spending as opposed to guesstimating. Armed with this specific information, you will be able to make even better informed financial and lifestyle decisions.
2. The next step to get control of your finances is to set up a budget. If you are mentally or emotionally blocked by believing you are not able to follow a budget, then call it a spending plan instead. The bottom line is you need to spend less time than you make, pay off your debts, save for future needs, and help others when you are able.
Write down how much you need to spend on each category such as tithe, food, housing, clothing, tide, car, entertainment, etc. This is the part where you tell your money what to do. Oh, also include savings in there as well.
Now, after adding up all of your proposed expenses, are they less than or equal to your take home pay? This is the time where you will realize that you need to cut some expenses to be able to live within your means. Be honest and realistic with this process and you will succeed. Creating a personal budget enables you to plan ahead for those large purchases, knowing how much you need to save each month.
And do not worry, your financial needs and perceptions are going to change often during the first few months of this, so simply review your spending plan regularly and make realistic adjustments accordingly.
3. With your tracking system and budget in place, you can now establish a regular savings plan. The rich get richer not because of tax breaks, but because of disciplined savings and watching it systematically grow. Unfortunately, you may not be accustomed to saving regularly as money is probably often spent as quickly as received. Get accustomed.
To start effective savings TODAY and get control of your finances, take a certain percentage of your take home pay and put it away in a bank account. Have it automatically deducted from your paycheck if necessary, but make that commitment. 10 to 15% is a worthy goal, but starting at 5% and working up might help make it doable for you.
4. Eliminate your credit cards by cutting them up. You know that you will use them if you go shopping. And by doing so, you usually will spend more. If you have not developed the discipline of paying off your credit cards when the statement comes, then it is time to stop using them.
As you remove the temptation, you force yourself to stay living within your means, spending only the money you realistically can afford.
5. Staying with the credit card theme, ask for lower fees from your credit card company. Simply dial the phone and ask them if you would be able to negotiate a lower rate. They will usually try to accommodate as it is in their best interest to keep you paying the monthly interest payments, as opposed to either you transferring your business elsewhere or the possibility of your account going to collections.
If you found this article helping you to get control of your finances valuable, please Tweet, Facebook, or email it to someone you care about. And if you are ready for some life changing financial coaching on making a budget work, simply let me know.
The five steps outlined above helps you to get control of your finances, and keep it, as opposed to your money keeping control of you. Once you do develop financial discipline, you will gain a lot more control and freedom over almost every aspect of your life.
Print Page
