written by: Adam Pepka
Getting on top of your finances means different things to different people. Is it affording your daughter’s birthday party? Taking your family into the city? Or to Bali? Or paying this month’s rent? Whatever your goal, the common denominator for most people is how overwhelming the effort can feel. So, instead of taking on grand plans, make smaller, daily adjustments to your spending. You’d be surprised how much money you can save by introducing the following tips to your life.
Set an Intention
The first step to taking control of your finances is to face them. Ignoring them won’t make them go away. Determine what you need. “More money” is too general, unless you plan on going out into the world to get a new job for the love of money. What do you need the money for, in the current financial situation you find yourself in? Think of it like a New Year’s resolution. Write it down on a piece of paper. Hang up your intention in a place you can see often. It will motivate you to pursue that specific goal rather than float around aimlessly.
Budget
As I said before, your intention doesn’t have to be fancy. It could be the trip of a lifetime, but it could also be honoring a monthly budget. You may already hold yourself to a budget, but it may be time to come up with a new one. This is especially true if you are not reaching your financial goals. Of course, the issue may be that you cannot enact the budget. The math could be objectively sound. But if you can’t solidify a budget, you may have overshot what was possible for you and your family at this time in your life. There is no point in putting undue stress on yourself to realize an unrealistic budget.
Basic Expenses
When it comes down to it, your life is made up of:
What you need
What you want, but do not need
What you need is the most important piece of the financial puzzle. If you can get that under control, you’re already ahead of the game. Make a list of these basic expenses:
Rent or mortgage
Insurances
Car payments
Gas
Utilities
Childcare
Food
Subscriptions and recurring bills such as phone, cable, etc.
These are the expenses that you cannot negotiate, without which you could not survive. I don’t mean to be overly blunt, in fact, I find it less overwhelming to have this list out in the clear.
Use Your Tax Return Wisely
Make sure you’re getting the most out of your tax return. If you have any doubt that you may not be getting the biggest refund available, I would consult a professional at Community Tax relief. You may not know what you’re doing, but they do. It’s worth looking into for greater savings.
Emergency Fund
A smart way to invest your tax return is putting it into an emergency fund. Getting out of debt is a challenge for anyone, but it’s especially difficult for anyone who’s experienced expensive, life-defining events they had no choice but to pay for. We don’t know when disaster strikes, but we must be prepared for it when it comes knocking on our door—or blowing off the hinges.
Protect Your Credit
Note that loans are a catch-22 that cannot be underestimated. Taking out high loans damage your credit, which in turn hurts your credit score and increases the interest rates on the next loan you would need.
Ask and You Shall Receive
Shop around for new insurance policies and phone carriers. You’d be surprised how much you can save each month by changing the company you’ve essentially hired as your insurer or your service supplier. As a general rule, we tend to accept what is handed to us. It takes guts to ask questions. I believe in you! Ask for the price that fits your budget. It won’t cost you anything. The worst that can happen is they say “no.”
Shop Around
In the same way that you may find ways to save by comparing phone carrier deals, be aware that grocery store prices can vary. Check out different store before committing to a purchase. It may seem like a lot of work at first, but before you know it you’ll know exactly where to go for select items. Look out for coupons, too, as you could save a significant amount on food and household needs each week.
Think Ahead
It may seem like too much to ask to think ahead when you feel like you’re drowning in your current finances or lack thereof. That said, if you can manage even the smallest amount, contributing to your retirement will serve you well. You think times are tough as a working person? Just imagine what dire straits would be like as a senior! Contribute to your 401(k) today. You will thank yourself later.
Conclusion
Money management is tough for most of us, but there are small, simple ways to take control of your finances. Be diligent and patient with yourself. You can do it!