Money is a mystery to many people and when I got out of college I was no exception. I knew I made a decent wage and I could afford to live but I never seemed to have any extra at the end of the month. When a large, unexpected expense would arise, I was sent running to my parents…or to my credit card. I had no control of my money; it was controlling me.

To control your money, you have to ask yourself a simple question: Where is my money going? Once you begin to understand where the money goes, it’s easy to track and manage it.

Where is my money going?

The first step is to figure out where your money is going. All of your money goes to one of two places: fixed expenses or variable expenses. Your fixed expenses are going to be things like rent, utilities, student loans, insurance and car payments. These expenses are the same amount every month and ongoing.

Variable expenses are everything else like groceries, restaurants, clothing and entertainment. All of these things can be planned and controlled.

One of the best things you can do to control your money is to create a Bills Calendar. Since I use Google Calendar, I made a new calendar called “Bills” and added all of the fixed expenses for the month. (Don’t forget any yearly expenses like Amazon Prime or XBOX Live, for example.)

How do I control my money?

Now that you know where your money is going, you can control your money with a budget. Yes — budget is a scary word. It was for me too.

Start with looking over your bank statement and listing all of your expenses for a month. Similarly, if you use Mint, this becomes even easier. Make a note of the categories you’re spending money and how much you’re spending each month. It’s good to look back at least 3 months, but the longer you look back the better idea you’ll have of what you’re really spending each month.

Next, find one of the many budget templates available online and fill it out. You won’t use every category, so just you what applies to you.

The biggest misconception I had about budgeting was that once I set it up, I had to live by it to the cent. A budget is a living document. It is meant to be updated and corrected until it is a true representation of what you’re spending. I review my budget every other month and make corrections as needed.

Automate your money

When you’re living paycheck to paycheck, the idea of Billpay is scary because you never know if you’ll have the money for the payment when it’s due. Now that you control your money, Billpay can save you money and stress.

Many bill payees (such as auto insurance and student loans) will give a small discount if you sign up for their auto payment system. In addition, if you know your fixed expenses are taken care of, you will never pay another late fee again.

Now that your bills are under control it’s time to pay yourself. When you’re 21, the idea of retirement is a lifetime away. You don’t see a need for savings or a 401k or anything your parents worry about. But it’s never too early to start saving.

Pay yourself

I look at my savings account as paying myself. Sure, I get a paycheck from my job, and I “give” a lot of it away. But I need to keep some of that money for my “future self”. I need to have money for car repairs, medical bills, or even a new computer or vacation.

I cannot emphasize how much less stressed you’ll feel when you start paying yourself and helping out your “future self”. Take a percentage of your paycheck and put it into savings automatically. You can set up a recurring transfer with your bank to move money into savings every paycheck, or you can set it up through direct deposit with your employer if you use a different bank with a higher-interest savings account.

(Photo credit: A Calculator and Statistics via Shutterstock)

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