Does thinking about your finances actually make you feel anxious? Many people go through life on a wing and a prayer hoping they have enough in their account to cover their expenses. If that sounds like you, stop. You need to step up and get your financial life in order.
Know Where Your Money Goes
Take two months to track every expense you make. You can do this on paper or download a free app. There are several out there that make it easy to track. The purpose of tracking your expenses is to open your eyes to how much you’re spending and what you’re spending your money on. You’ll be surprised at how much money you spend on things you don’t really need.
Create a Realistic Budget
Once you have an idea of how much money you spend, create a budget that’s realistic. The important thing is that you have less expenses than the amount of money coming in. Your budget should leave breathing room because some months throw you a curveball.
Use the Envelope System
The envelope system is a great way to get your financial life in order. The way it works is that you put money into envelopes for each variable expense. For example, you might have an envelope for groceries and put in what you budgeted for groceries that pay period. Leave your debit and credit cards at home and rely on only what’s in the envelope. This will force you to be careful with what you buy.
Buy with Intent and Purpose
Don’t just purchase things because they are on sale or they catch your eye. Everything you buy should have a purpose. If you have items laying around your home that are still in their packaging, you need to really think about what you’re doing with your money.
Pay Off Debt
It’s important that you pay off your debt. Debt hangs over you and makes it hard to focus on being financially successful. Put as much money as you can toward getting out of debt.
Be Smart with Your Money
Last, but not least, be smart about your money. This means you need to start an emergency savings account, open a retirement account, diversify how you save your money, and make the most of the money you have.
If you want to get your financial life in order, follow these tips. It will take time, but it’s well worth it. Being in a good place financially greatly reduces the stress in your life. That doesn’t mean you need to be rich, you just need to be financially responsible.