No one enjoys living paycheque to paycheque. It is stressful and taxing on our health and personal relationships. Even the smallest unexpected expense can affect us and throw our life into temporary chaos. But how is it that some people always appear to have money? What are they doing differently from the rest of us? Managing your personal finances is crucial to avoid this chaos.
If you are exhausted from struggling financially, there are a few things you can do to change your situation. The strategies in the following article need to become habits – a way of living if you’re really thinking of managing your personal finances.
#1. Set Goals
Financially stable or even wealthy people do not become that way by some magical potion. Most of them build up this wealth.
Perhaps they aren’t even considered “rich” but they are never short of money and having to decide which bill to pay over the other. They have this financially stable life because they plan and have clear monthly and annual goals.
- What is it that you want for your savings?
- What do you want to be able to do with your money?
Within these goals, be prepared to set realistic milestones and deadlines to achieve them and stick to them. Just because you set these goals and deadlines doesn’t mean that it will instantly happen. Be ready to cut some expenses and even find ways to add to your monthly income.
Not only think about your goals but also write them down.
I know it sounds cheesy but if you write them down and post them where you can consistently see them, you will find yourself more dedicated.
- What are your goals?
- Where do you see yourself at this time next year?
- What are you saving your money for exactly?
Be clear. Be concise. Be realistic.
For example, I want to pay off my VISA by December next year or I want to save $2500 by October next year.
Once you have set your goals, you will know what you want. In a perfect world, all of those goals could be achieved simultaneously. However, we know this to be utterly unrealistic. This is where you need to prioritize and figure out which goals are the most important – one of the most important habits of disciplined people.
List your goals in order of most important to least important. This allows you to recognize where your focus must lie and you can then move forward. Before you know it, you will begin to see real results and your goals being achieved!
#3. Continue Learning
The world is constantly changing. In order to keep up with it, you must be willing to be continually learning and expanding your knowledge set. This may mean taking an evening or online course.
It may also mean just doing some research on the Internet or reading a book about financial strategies about investments and saving.
Surround yourself with the knowledge from those who are already successful. They have the information and habits of successful people for a reason.
#4. Have the Right Mindset
“Always do your best. What you plant now, you will harvest later.” – Og Mandino
No matter what you do in your life, always put forth your best effort. Do not be mediocre if you want true results. People who have money always concentrate on doing their best when it comes to work.
When you put in the extra work that is of quality, you will reap the rewards and that is no different when it comes to managing your personal finances. People around you will recognize the effort you are putting forth and in turn, may reward you with raises or additional opportunities. You never know what opportunities will present themselves or when, so always be at your best and stay positive, no matter what is thrown your way.
#5. Measure Risks
Thinking logically is critical if you wish to have money. Often our feelings drive our financial decisions and can lead to further money woes and now you have to figure out how to cope with the additional stress.
Think about it. You have had a bad day and decide that you should treat yourself to an expensive night on the town. You deserve it, right? Perhaps you do but is it worth it knowing that you have ignored your goals and will be suffering financially next week?
Keep your goals front and center. Have a clear vision about what you want and adhere to it. Separate your wants and desires from your needs and goals.
#6. Seek Financial Education
Sometimes the information we find online is confusing or even questionable. So, seek out classes at your local university or college.
Sometimes even the local libraries bring in speakers to speak about becoming financially secure.
Alternatively, seek out a knowledgeable financial advisor at your banking institution. Capitalize on those opportunities.
#7. Follow a Budget
Budgeting is one of the most crucial strategies to implement into your life if you want money.
Is it easy? Not always but if you stick to it, you will find you will have money at the end of the month to put towards your goals.
Examine with a fine-toothed comb how you currently spend your money. I am talking about to the last penny as every penny counts. Then incorporate the goals you have set out for yourself and figure out how they work in the budget. Inevitably, what you are doing at this moment is not working (or you wouldn’t be reading this??!!).
Therefore, you must revamp your budget to reflect your new way of thinking and follow through with it.
#8. Set up an Emergency Fund
Your car needs new brakes. Your refrigerator suddenly dies. Your condo fees increase next month. Emergencies happen and if you are living from cheque to cheque, they can debilitate you financially. This is why an emergency fund is necessary and essential when it comes to managing your personal finances.
Have a certain amount from each pay period put into a separate account that is strictly for emergencies. Although you do not want to be using this fund for anything besides emergencies, make sure it is easily accessible. This way, you can use it when necessary.
#9. Have a Variety of Bank Accounts
If you are serious about saving and achieving your financial goals, you need a variety of bank accounts.
Open up a savings account that is not easily accessible. Research the amount of interest you will be getting. Are they better choices for your needs?
#10. Avoid Credit Cards
Credit cards are a form of free money, right? If this is how you are currently approaching having credit cards, I can almost guarantee you are in financial trouble. Interest rates are often incredibly high and as a result, you are paying double or even triple for things you probably don’t even need.
Cut up those credit cards and live within your means. Approach the world as if it is cash-only. You are probably saying, “But I NEED a credit card!”
There are definitely instances where you do (online shopping, booking a hotel room). In these cases, either choose a pay as go version or get your limit reduced dramatically. This way, you can still use it if need be but it also will keep your overspending in check.
Managing your personal finances does not need to be daunting or out of reach for everyone. Be realistic about your income and your expenses and make decisions that are going to enable you to reach your goals. No one else is going to do it for you but there are many opportunities out there waiting to be had.
We would love to hear your stories about how you are reaching towards your financial security.