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5 Ways to Get in Control of Your Finances

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5 Ways to Get in Control of Your Finances

It’s easy to lose track of your finances, especially if you’re a busy person or if you’re not quite sure what you’re doing. However, personal finance is a major factor is securing a comfortable life for yourself. It’s important that you understand where your money is going and how it’s being saved. With the proper know-how and techniques, you can save the most efficiently.

Money shouldn’t be a stressor for you. In fact, it can be quite interesting and a little fun to keep track of your income and expenses! Once you see how your money comes in and out, you’ll feel more reassured when spending your money. Here are five ways to get in control of your finances:

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Get Educated on Personal Finance

Personal finance is something that we should all know as adults, but sadly, we’re not always taught it in schools. Or if we are, we easily forget the minor deals that could save us a lot of money in the long run. If you feel that you’re unclear on managing money, whether it’s the basics or a specific aspect, you should brush up on your personal finance knowledge. Now, this doesn’t mean you have to go back to school. The good news is that these days, knowledge is free and readily available online. And with video tutorials, eBooks, and podcasts, knowledge is in the medium of your choice! Find some highly-rated tutorials online and get started.

Use Budgeting Software

Once you are more familiar with the ideas behind personal finance, you should put that knowledge in to practice. Nowadays, there are tons of different programs and apps to help you keep track of what you’re saving and spending. They all have different features, so do a little research before you dive in. Or, try using two alongside each other to see which you prefer. Budgeting is important because it keeps your goals in black-and-white, giving you less of a chance to slip back into bad habits. Even if you aren’t good with computers, you can go the old-fashioned route: a pencil and paper!

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Pay Down Your Debt

It seems everyone has an opinion on personal finance, and even the professionals are all going to have different ideas about how best to save your money. But most will agree that your first priority when getting in control of your finances should be to pay down any outstanding debt you might have. This is because debt accumulates interest, which is compounded, meaning that the longer you wait to pay off your debt, the faster it grows, and the harder it will be to pay off.

Choose a Bank and Credit Card That Work Best for You

While there aren’t many huge differences between banks, each bank will have slightly different features than the other. Perhaps one bank has more ATMs around the city you live in, or perhaps another has a good online banking system and app for your phone. Keep in mind, also, that different banks may offer different interest rates for your bank accounts. Choosing a credit card will offer the same kinds of decisions for you. Some credit cards offer cash back or frequent flyer miles in return for you using their card. Read up on on the different banks and credit cards to find out what best fits your interests.

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Be Frugal

Frugal, despite common belief, does not mean “poor.” It means spending your money as wisely as possible. Experts will tell you that you should always live below your means. How you choose to be frugal is up to you. Perhaps that means living in a home that has a cheaper rent or mortgage. Or perhaps you should aim to spend less on entertainment each month. If you have a budget and are keeping track of how you spend your money, you should be able to figure out where you can best cut your spending. Additionally, online coupons and vouchers can help you save on your monthly expenses.

Personal finance isn’t always easy, and there will be times when something doesn’t make sense. Don’t give up! The result will make all the trouble worth it. And if you follow these tips, you’ll have a solid foundation for getting back on your financial feet.

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Featured photo credit: 20 Best Personal Finance Books You Should Read Now via lifehack.org

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Last Updated on July 20, 2021

Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

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Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

Have you ever considered your life now, and how it would be if you had more time to spend with your family and less worries about money?

Nowadays, financial stress is one of the most troublesome weights in life. If you’ve ever encountered financial stress, you know the difficulty of not having enough income to pay your obligations or bills.

Many people say that money is not the ultimate goal of life. While that’s true, money certainly plays a very significant role. The meaning of financial freedom changes with the different phases of our life, but ultimately, it is something that many people strive for.

In this article, we’ll explain how to capture that financial freedom you’ve been looking for. Read on to learn the secrets to financial freedom.

Break Free of Your Finances

Financial freedom is about having a constant flow of cash from your assets to cover all your regular needs.

When you are not worried about your income, or living paycheck to paycheck, you gain a great sense of freedom. It’s the freedom to be obtain and do what you truly need to make your way through everyday life.

Gaining financial freedom, though, is a process of growth, making small improvements and gaining emotional strength.

Though it seems hard to believe, it is really very simple to get financial freedom.

To do so, you simply need to make sure that your assets exceed your liabilities. In other words, you’ll need to find the sweet-spot where your residuals meet or surpass your expenses. This is something that you can achieve with the proper plan.

While not every person will accomplish financial freedom, the potential for anyone to do so is certainly there. Anyone can achieve this success, regardless of their income level.

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Outlined below are 9 secrets that will help you in your goals of achieving financial freedom.

1. Stop Unnecessary Spending

We often spend money inwardly, instead of objectively.

For example, you may spend when you’re anxious, depressed, restless, exhausted, from fear of missing out, or to please others. This is a very unhealthy way to handle your finances.

To stop this habitual spending, log down all your spending over the course of a month.

Just as some people keep a food diary, keep an expense diary. Remember not to just write down how much and what you spent the money on, also include the circumstances of why you spent the money. Was it an impulse buy at the checkout line or was it something you planned to purchase?

This increased self-awareness could enable you to avoid triggering situations in the future when you are considering an impulse buy.

2. Plan a Monthly Budget

This is a great opportunity to get serious.

Take a seat with your spouse or partner and make a monthly budget based on your income, not your expenses. You are never again going to spend more cash then you have on hand.

Overspending is the thing that led you to more financial obligations. Make sure you decide every month what is coming in and what will be going out and stick to that budget… no matter what.

3. Cut-up Credit Cards

Perhaps you are the type of person who always pays your credit card balance in full before the end of your billing cycle, and enjoys the reward points you gain. If this is the case, then you’re already way ahead of the game.

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If not, you may want to consider ridding your life of the burden that credit cards bring.

Many cards have strategies set up so that if you make a certain number of late payments, they will raise your interest rate much higher. This can really add up in the long run and you won’t be doing your financial situation any favors. If you’re prone to late payments or have a large balance due on your cards, cut them up!

Without proper self control on credit card spending and payments, you are basically throwing your money away. To ensure that you have better control over your spending, use only cash or debit for all future purchases (and don’t forget to pay at least your minimum payment on your cut-up cards each month!).

4. Increase Savings

There is no doubt that for a comfortable retirement you must accumulate satisfactory savings throughout your working life.

It’s good practice to save up to 15% of your income.

Start with your workplace 401(k), if you have one. If not, a Roth IRA (if you are eligible) or a traditional IRA (if you are not eligible for the Roth) are the next logical steps.

Increase in longevity means you might be able to look forward to 25 to 30 years in retirement, or possibly even significantly more. Investing now in good retirement plans will ensure that you have a guaranteed a stable monthly income when the time comes to stop working. [1]

5. Invest Wisely

Consider investing in funds.

Specifically, you will gain higher returns if you invest in different types of mutual funds such as Debt funds, Equity funds and Hybrid funds with a proper balance, although it absolutely relies on your personal preferences and sense of risk taking.

To get the most of these benefits, make sure you are investing in a variety of assets. Another resource of investing in mutual funds is SIP (Systematic Investment Plan) where you invest some money every month in funds. SIP works by averaging the per unit price of the stock.

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Mutual fund investors are aware of the benefits of an SIP (Systematic Investment Plan). For one, it is the most secure way to invest in equity mutual plans so that wealth is created over a long period of time. This plan also helps you to gain a better sense of financial discipline, which will come in handy in all your financial endeavors.

6. Invest in Gold

There isn’t really a better way to invest in gold than to have the physical gold itself in your possession.

You can purchase gold coins and bars from mints as well as from coin dealers and other private sellers.

Another way to invest in gold is through ETFs (Exchange Traded Funds).

These are is similar to mutual funds but they are exclusively investments of gold. ETFs are great because they offer more liquidity; the ETF owns the actual physical gold, stores it, and retains the value of the shares. These shares can then be bought and sold in the stock market, and one big benefit is that the transaction costs of gold ETFs are much lower than the that of physical gold.

With its consistently-increasing demand, investment in gold can be very wise long-term investment to make.

7. Stash Emergency Funds

Whether it’s a cash gift or a work bonus, always try to save any extra money that comes your way rather than making unneeded purchases.

If you get paid every other week, you’ll get an “extra” paycheck (three rather than the usual two) twice a year. Either save those paychecks towards your emergency funds or utilize the money to pay down other obligations, such as loans, credit cards or other debts.

Make it hard to get your cash.

Put your savings in an alternate bank, maybe an online bank that forces you to delay for several business days before transferred money hits your regular bank account.

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8. Find Fabulous Mentors

Find a mentor, such as a friend or family member, who has exceptional control over their finances and pay attention to everything they do.

If you do not have any friends or family that are enjoying financial freedom, then find a mentor online! There are numerous blogs and guru websites featuring the advice of many people who have reached financial freedom, and they exist primarily to let you in on how to achieve it for yourself.

There are also plentiful forums available that share tips and tricks on how to best achieve financial freedom. Read as much as you can and start changing your habits for the better.

9. Be Extra Patient

Patience is the key of financial success.

Being patient can be quite tough, especially when you’re struggling with your finances, but having faith is worth it. You’ll continuously be on the right track if you are taking the proper steps above.

So don’t be discouraged, even if you are only saving a few dollars a month; it all adds up. Within just a few years you’ll look back proudly at your accomplishments and be glad that you had the patience to get there.

Financial Freedom for All

Anyone can achieve financial freedom, regardless of their financial circumstance.

Use the tips provided above to get yourself on the track to financial freedom and toss your monetary concerns out the window. If you wish to achieve a life with financial freedom for yourself and your family then you must adopt a disciplined approach towards your finances.

Following the simple secrets above is a great start to making your money work for you, so you can work less and live more!

Featured photo credit: rawpixel via unsplash.com

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Reference

[1] Hartford Gold Group: IRA Retirement Accounts

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