When you were counting down to the New Year in 2018 and imagining all the things, you’d like to change in 2019, did you find yourself focusing mainly on your financial issues? Problems with money are some of the common issues that people face around the world today. Throughout the US, countless everyday individuals just like you bite their nails day after day, wondering how they’re going to make ends meet.
The good news is that you don’t have to simply accept a life of financial hardships. If you’re willing to examine your spending habits and possibly make a few changes, then you can benefit from a happier, more organised life, free from the stress of financial woes.
So, how do you get started?
1. Create a Budget
The first and most obvious step in gaining more control over your money is creating a budget. Budgets might not be the most exciting thing in the world, but they give you an insight into your spending habits and show you where you need to start cutting back each month.
Begin by looking at how much money you have coming into your bank account or home on a monthly basis, and how much you have going out. Ideally, you’ll need to have enough money left over after you’ve paid your “essential” bills like mortgage fees, any outstanding loans or credit and month to month utilities, to save for the future, build an emergency fund, and buy the things you want right now. If that seems impossible, then it’s time to look at your spending and find places to cut down.
2. Switch to an Envelope Budgeting System
One of the biggest reasons that people struggle when it comes to budgeting is that they find it difficult to immediately stop their bad spending habits. When you’re used to being able to dip into your savings whenever you see a great deal in your favourite store, it’s hard to hold yourself back just because your budget says you should. A good way to make a difference fast is to leave your credit and debit cards at home, and only go out with the money that you need.
Withdraw the full amount of cash that you have to spend in the month and separate that money into different envelopes for each week. You can also separate the money further, into money for entertainment, food, and other things. With this approach, you can see exactly how much cash you have each day, and you’re less likely to go over your limit.
3. Talk About Your Budget
One of the most crucial things you can do to improve your chances of a successful budget is talk about your money concerns with the people that you live with. Remember, a budget is a flexible thing. You can change your strategies if you need to, as long as you’re taking steps towards your financial goals.
By talking to other people in your family about your budget, including your kids and your spouse, you might find that you can come up with ideas on how to manage your money that keep everyone happy. Just remember that if you’re budgeting as a couple, you’re going to need to be prepared to compromise if you want your budget to work.
4. Know Your Problem Areas
Sometimes, sticking to your budget will be easy. Other times, you’ll find yourself struggling to follow your own rules. It’s a good idea to track down the trigger areas in your spending habits that might push you into going over your limits. For instance, if you know that you always spend too much when you go out with your friends, prevent yourself from taking a card with you on those trips. If you only have so much cash-on-hand, then you won’t be able to spend extra.
The more you know about your problem areas, the easier it will be for you to avoid situations that will tempt you into spending.
5. Look for Ways to Handle your Debts
Finally, if you want 2019 to be the year that your financial woes come to an end, then the first thing you need to focus on is getting rid of your debts. Whenever you have a little money left over in your budget, don’t simply spend it on extra treats or takeaways. Look into how you can pay a little extra off your debts. While an extra $20 here and there might not mean much at first, it will help you to get rid of your debt faster, so you spend less on interest.
The less you pay on interest each month, the more cash you’ll have to put towards the things that you really want in life.