Controlling your finances can be difficult. With rent or a mortgage, student loans, daily expenses, and more piling up, it can be challenging to face your financial situation. Unfortunately, facing the scary state of your finances is a necessity so that you can get back on your feet and start saving money again. With the right financial plan, you can save up for buying a house, going on vacation, and even purchasing a new dress.
The good news is that it’s possible. The bad news is that it’s going to take hard work and dedication to take control of your finances. We understand that it can be overwhelming, which is why we put together this list of four (yes, just four) ways that you can take control of your finances. You can start each one of these today.
1. Consider Long-Term Investments
It can be difficult to consider your financial future when you’re struggling in the present. However, by looking into the future, you can help yourself manage your current financial situation. The items that you purchase now can save you money in the long run. For example, if you’re a homeowner, you can purchase a new air conditioner to replace your old one that doesn’t work well.
In fact, an air conditioner that’s old and struggling to keep up could be costing you more money because it uses more money. Purchasing a new, more efficient air conditioning system may be a large upfront purchase, but it will save you money in the future.
You may have to think outside the box about the things that are costing you money. Long-term investments aren’t as easy to spot as things that are right in front of you.
To help you determine what you can spend money on now to save in the future, look around your home and at your checking account to see what things you spend money on. That gym membership you pay for can easily be replaced with an at-home fitness machine. While you may see the large price tag and panic, the cost savings in the future will be beyond compare.
2. Always Comparison Shop
When you looked around for your first apartment after graduating college, the odds are that you did some research before deciding which one was right for you. Comparing rent prices likely helped you determine which apartment to rent. Comparison shopping is something you should always do, no matter what you’re purchasing. You should compare everything from your internet service provider to your bed sheets to get the most bang for your buck.
Thanks to your smartphone, comparison shopping is easy. All you have to do is search a few words on Google, and you’ll be bombarded with options. When it comes to finding the right option, remember that the cheapest may mean sacrificing quality. However, comparison shopping can also help you determine the expensive options that you should not choose.
3. Start Budgeting and Planning
The best way to control your finances is to make a plan and stick to it. Part of this process will involve creating a monthly budget. This budget will tell you how much money you can spend on the things you need so that you can start saving what’s left.
Make sure to add all of your daily, weekly, and monthly expenses to your budget. You can start by gathering your bills or looking at your spending on your bank statements to understand how much money is going out each month. From there, look at how much money is coming in from your job(s). Make sure to budget for everything, including your groceries.
When you take a look at your budget, make sure you gather all of your debt as well. If you’re not currently paying off your debt, include it anyway so that you can see how much you will be spending when you are actively paying it off.
Once you have a clear picture of your spending habits and how much income you’re really bringing in, you can start saving when you can. Not everyone can save off of every paycheck, so don’t pressure yourself to throw money into your savings when you have bills to pay instead.
When you figure out just how much you can save each month, you can start setting goals. Make sure that these goals are realistic so that you can achieve them. Start by developing shorter-term goals such as having x amount in your savings in six months. Once you begin achieving these goals, you can start creating long-term goals, like saving for a downpayment on a house. By setting goals each month, you can keep yourself motivated to keep saving.
4. Give Up What You Can Live Without
While you may get used to your lifestyle after some time, it’s important to take a look around you and see what you can cut out so that you can save money. If you’re spending money on streaming services like Netflix, Hulu, HBO Max, Amazon Prime, and you have cable, consider dropping something to save money every single month.
Similarly, take a look at your grocery list. If you see a lot of junk food, take it off the list and save money for more nutritious food. One of the biggest myths is that healthy food is expensive. Luckily, that’s not the case when you shop for fresh fruits and vegetables, which are typically cheaper than a bag of chips.
While you’re cutting out junk food, make sure to cut out fast food as well. Fast food and having food delivered to your home is much more expensive than shopping for and making your own food.
Another thing you can give up is using your credit card too much. Your credit card may make you feel like you can buy almost anything you want, but in the long run, you are likely spending too much money playing off your bill month after month. While you should cut up your credit card because it’s beneficial for boosting your credit score, you can opt to purchase only things that you can pay off immediately.
Overall, taking control of your finances can sound like a daunting task. Fortunately, there are plenty of ways you can better meet your financial goals, whether it’s saving for a down payment for your first home or paying off your student debt. With these four smart money management tips, you’ll be able to take control of your finances in no time.
About the Author:
Matt Casadona has a Bachelor of Science in Business Administration, with a concentration in Marketing and a minor in Psychology. He is currently a contributing editor for 365 Business Tips. Matt is passionate about marketing and business strategy and enjoys the San Diego life, traveling and music.