MomsGetReal is focusing on helping people improve their lives mind, body, and soul – but we would not want to leave out a most important area of improvement – personal finance.
Guest Author Kristin Mullen
You may have made the New Year’s resolution to get healthy or be more active, but have you ever considered the status of your financial health? Now is a great time for you to focus on your personal finances and make sure this next year is much better than the last.
Start a Budget
The first thing you need to do when you are trying to improve your finances is to set a strict budget. The more money you are able to save, the better your financial future will be, so make sure you create a budget that will save you the most money but is still reasonable enough for you to follow.
When creating this budget, the first step is for you to track all of your spending for at least one month. Write down every penny you spend and what you spend it on. Gather all of your financial statements for the month and add those to your list as well. Add up all of your expenses at the end of the month and look to see where you might be able to save some money. Obviously, you aren’t going to be able to save with some of your fixed expenses like your rent or mortgage payments, but you might be able to save some money on groceries, cut out unnecessary spending at the department store, or cut your cable bill for a short time if necessary.
Once your budget is set, make sure you are committed to stick to your plan. Continue to journal all of your expenses so you know exactly where your money is going. Also, reevaluate your budget at the end of each month. If something isn’t working, change your plan until it works for you.
Save Before You Spend
Far too many people spend their paycheck and then try to save what they have left at the end of the month. With this strategy, you will end up saving very little or maybe nothing at all. The best strategy when it comes to saving is to save first and spend later. Add a savings “expense” to your monthly budget and treat it as if it were any other expense. Put that money away as soon as you get your paycheck and budget the money you have left. With this savings account, the possibilities are endless. You could save for a romantic vacation, have some money set aside for emergencies, and everything in between.
Get Rid of Your Debt
Another important factor to making sure your finances are stable and healthy is to be debt free. This may not be as easy as it sounds, but it is very important for your financial future to get rid of as much of your debt as quickly as possible. However, if you are having trouble making your payments on time, you may need to consider negotiating a new payment plan with your creditor.
Do as much as you can as quickly as you can, and take the proper steps necessary to pay off your debt before you make any more large purchases. Pay off your credit cards completely before you make any more purchases with them. Once they are paid off, you still shouldn’t use them unless you are prepared to pay off the balance immediately. Don’t buy a car on payments when you are still making payments on another car. Try to get buy and put the amount you would normally pay each month for the new car into a separate savings account. If you are able to save long enough, you will be able to pay for a new car in full when you need to.
Finally, make sure you are teaching your children these new financial habits. Let them learn from your mistakes, and give them the advice they will need to make sure they don’t make the same mistakes you did. With your help, you can prevent them from making poor financial choices and help them be financially successful in the future.
MomsGetReal is grateful to have Kristin Mullen lend her expertise in business, marketing, credit cards, and personal finance as a guest contributor. Mullen works for a website that focuses on educating readers about debt consolidation.