5 Important Finance Tips

Thursday, May 10, 2018

When it comes to money, everyone seems to think they know what they're doing but yet we all still struggle.   Why is that? Maybe it's because we aren't educated enough on how to properly manage our finances.  So today I'm going to share 5 important finance tips that can help you get your money in order regardless of your financial situation.

Set a Budget
A great way to know where your money goes is to look at 2-3 months of bank statements and receipts.  Break everything into a category and it'll give you a rough estimate of what you spend each month.  Obviously some of those expenses aren't necessary (clothing shopping every weekend) while others are very important (groceries).  Create a budget spreadsheet of your monthly net income and then track how much money you spent per month in each category.  See what your leftover amount is and if it's negative or zero you may want to refine your categories and expense amounts. This will allow you to create a smooth flow of where all of your money goes.  You may need to create new categories for expenses that come up a few times a year like car maintenance.

Track Expenses
Moving forward, track all your expenses carefully so you can see how you handle the money you have.  This helps hold you accountable when you start spending too much money on things that aren't completely necessary.  Save all your receipts and consider using cash instead of a card because you're more likely to resist the urge to let the bills out of your hand for an impulse buy.

Build A Savings
A savings fund is crucial these days for emergencies and as a safety net in case you happen to find yourself unemployed for a few months.  Try to come up with $1,000 at first as a general emergency savings fund.  DON'T USE IT unless it's an absolute emergency.  You'll notice you feel a lot more secure about your finances just knowing you have some money stored away. Any time you have to tap into your savings, make sure you replenish that money as soon as you possibly can.  And if you think you don't have any extra money to put into your savings consider any additional income you make from side jobs, money gifted to you, or even your tax return.

Boost Your Credit Score
Even if you are still working to build your credit back up, there are bad credit loans out there that will still allow you to take out a loan even if you have a low credit score. If you don't know your credit score, check it out as soon as possible.  This gives you an idea of how potential lenders see you.  Then work on keeping your credit score high and healthy by paying bills on time, not applying for too many small credit cards, and paying off current debt.

Eliminate Debt
Ah debt, that horrible nightmare that follows you around constantly.  If you have debt, figure out what amounts you owe to which lenders and once you have $1,000 in your savings, work on putting any extra money each month towards your debt. If you have a smothering amount of debt you may need to sell things or even get a second job. 

If you keep these important tips in mind, you should feel much better about your finances and you'll feel more in control of your spending and saving. 

Be sure to join my Facebook group, Fixing Your Finances, to help you with your finance journey along the way. 

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