Have you lost control over your finances? Sometimes we work so hard for our money that we often forget that we should be the ones in charge of it. Become the boss of your finances again by following these 5 steps:
Step 1: Study your financials
The first step is to know what is coming into your account every month, and what you have been spending it on. You also have to know how much you owe and to whom.
Step 2: Set money goals
Set clear short-, medium- and long-term money goals. It will help put your spending in perspective. For example, if you don’t have a retirement fund, you probably shouldn’t be buying a new car. Or if you have no savings for your children’s education, revamping the house is perhaps not the best idea.
Step 3: Draw up a budget
Based on your findings in Step 1 and your goals set out in Step 2, formulate a budget that has room for all the things you have to pay, including debts and contributions to your savings and emergency fund. After this is done, you can allocate budgets for the “wants” like entertainment, clothing, etc.
Step 4: Track spending
The easiest way to lose control of your finances is by not tracking your spending. Every little purchase needs to be deducted from somewhere. Make it easy on yourself and use a mobile app that helps you stay on track. Here are a few that you can try.
Step 5: Have a weekly status meeting
A good boss is one that stays in the know. The best way to do this is by having weekly status meetings with your staff or management to see if your business is heading in the right direction.
The same is true of your money. Now that you are the boss of it, you have to catch up with it weekly to see whether your spending is on track compared with your budget and the commitments you have for the rest of the month.
Remember, if your finances are too messed up and you find yourself behind on payments, it is natural to want to stay oblivious of your money matters, but don’t. Don’t wait until it is too late. Take charge, and if you are too over-indebted to see a way out, contact Debt Rescue today!