C.J. Braden • 3 Minute Read
How to get your finances in order
It can be hard to know where to start when it comes to getting your finances in order. It would be best if you covered so many different areas, and there is no one right way of doing things. That's why we've put together this blog post.
This article will give you some general tips on how you can get started with managing your money more effectively, so you can sit back and enjoy a financially independent life!
Budgeting is helpful in money management
#1 Stick to your budget
The first thing you need to do is work out what you can afford. To do this, it would help if you used the SMART method:
Specific
What is your goal? Be specific. This means that you need to work out exactly what the budget should be for and how much money you can put into it each month. For example - "I will set a $200 per month food allowance."
Measurable
How do I know if I've achieved my goals? You'll have a good idea of whether or not you're on track by using this simple formula: Budgeted Spend / Actual Income = Deviation from Plan
If your number is greater than 0, then you are spending more than planned; if less than 0, then you could afford to spend more! So keep adjusting until it equals zero (or close enough!).
How to get financial freedom in your life
Achievable
Is the goal achievable? If you don't think that this is achievable for your current situation, then it's essential, to be honest with yourself and either adjust the goal or try again next month.
Relevant
Does it work towards my goals? Your budget should help you achieve what you're trying to do. For example: if your plan were to spend less and save more - would a $200 per month food allowance really get you there?
How to save more money
Timely
Is now the right time for you to set your new budget/goal? Make sure that setting this goal doesn't mean delaying other things which are also important (e.g. paying off debts).
Saving money is the key to financial freedom
#2 Save as much as you can
It's important not to forget about saving as you're working out your budget.
This doesn't just mean setting up a savings account and putting some money in there each month, although that is part of it. You'll also need to think about what other sorts of savings you could be making: For example - repaying any outstanding credit card balances; or investing in stocks and shares rather than keeping the cash under the mattress!
Saving money helps with unexpected costs
Remembering these different types of 'savings' helps make sure that you can cover all eventualities. For example, when something unexpected happens (like an emergency repair on your house), having multiple sources for this expenditure will help keep things running smoothly behind the scenes!
Savings can also come in handy when you have big plans for the future, such as buying a house for example. These savings can then be used for a significant down payment and will then be factored into your overall Mortgage Quote when it is calculated.
Saving money can help you buy a house
#3 Stay away from bad debt
Debt is a massive issue for many people, and it can be really hard to get out of. If you use credit cards, make sure that you only spend what you otherwise have spent (if not on the card) and pay off your balance in full every month! This will help to avoid paying interest charges which quickly add up.
Avoid credit card debt when trying to save money
Be careful with payday loans: Don't take them unless they're absolutely necessary; if you do end up using one, try to repay as soon as possible (before interest kicks in!). If this isn't an option, see if there are any schemes available through the local or national government to make repayment manageable.
C.J. Braden is a regular contributor and editor for Carolyn’s Blooming Creations. She has been featured in numerous media publications such as InStyle Magazine, on HGTV, on Bustle.com, and more. She is the author of the books Georgia McMasters in Amethyst Lake Cemetery, How To Be Yourself: 3 Little Ways to Get Back To You Being You, and the illustrator for the children’s book Bridging Connections. She is a former classroom teacher that now dedicates her life to educating others on how to live their most healthy, creative and happy life. Learn more about her visiting our About Us page.
This is a collaborative post and may contain affiliate links. All opinions and ideas expressed in this post, however, are based on my personal point of view.