How to Take Control of Your Finances
When it comes to managing your personal finances, it is important to understand the basics and learn how you can manage your money wisely. Not knowing how to handle your finances wisely will lead to several repercussions such as stress, from not being able to pay bills or not having enough to cover unexpected expenses.
Making the best financials choices to save and take control will allow you to make decisions based on what you want and the limits of your financial situation.
Here’s how you can take control of your finances.
1. Decide Where the Money Goes
To start taking control of where you stand, you will need to keep track of your income and expenses. You must be aware of where their money goes every month. Otherwise, you may end up spending all of it.
2. List Down Financial Goals
Decide how you want to achieve your financial goals in both short and long term. Perhaps you want to save money for a trip, or even a down payment on a house or car. Maybe your long-term goal is to retire young and be able to travel the world. Whatever the goals may be, the key is to write them down.
3. Create A Guide For Your Goals
Once you know where your money is going and what are your goals, you can take steps to align the spending based on your priorities. Financial experts advise the 50/20/30 rule. This means that 50% of your income will go to essentials such as rent, transportation, utilities, food and medical. The 20% will go to debt reduction, savings, and charitable contributions. The 30% can be used for flexible expenses such as cable, phones, etc.
4. Ask a Financial Advisor
While it is your finances to manage, you can consult a professional financial advisor to help give you tips. You can ask how to pay off debt, stick to your budget, and even save up money for major expenses like cars, house or cornerstone rehab, etc.
Follow this guide and help you find your way to financial freedom. Create a plan and make it happen!