Money can often be an overwhelming topic that can lead to tough situations which can be difficult to deal with. Debt consumes many people and they feel like they can not get out from under it. Money and finances can cause stress in many relationships if not handled and balanced correctly.
If you do not specialize in finances then knowing how to budget can be difficult. Paying off debt is something that isn’t taught much in-depth in our educational system. No wonder why so many families struggle financially.
Here is a list of 5 important ways you can improve your finances.
Either you love ’em or hate ’em. Budgets can help to improve your finances almost immediately! Budgeting is a great way to see where you are spending your money and how much you are spending per month. You also learn how much money each month is coming in.
Every month you want to compare your expenses with your income. You never want to be spending more than you make. By setting up a budget you will feel like you have your finances under control instead of finances controlling you!
Start your budgeting from one of these resources below:
- Mint – A great software for setting up a budget
- Budgeting For Budget Haters – A budgeting course
- Monthly Budgeting Planner – A budgeting planner you can use to easily track your finances
2. Set Specific Financial Goals
If you are serious about taking control of your finances you need to set financial goals. Such as paying off your credit card in 6 months, put $100 towards buying a new car every month, and paying off student loans with a 5-year time span.
When you set financial goals you have to put actions in place to reach those goals. Because chances are, they won’t happen if you don’t do anything.
When setting goals you can use the SMART method.
Your financial goals will help you go from where you currently are to where you want to go. Without them, you will feel like your finances are taking over your life instead of you taking control of your finances.
3. Get Out Of Debt, Quickly!
Setting goals to get out of debt is something that you owe to your future. Debt plays a very important role because if you acquire too much debt it can affect you and your family negatively.
Having a bit of debt on not necessarily a bad thing. Like having a mortgage on a house or car payments are good forms of good debt. Debt becomes bad when you do not control it. For example, you don’t want to buy a house or car that you can’t afford.
Debt is something that often consumes many people because they get into debt and they don’t know how to get out of it. We paid off our car in 6 months and we did this by setting a goal from the beginning that every time we got paid we put a certain amount towards the car payment.
Doing so allowed us to pay off our car payment in 6 months. Sit down with your husband or significant other and go over your finances and set a game plan to help you get out of debt!
“a budget is telling your money where to go instead of wondering where it went.
– Dave Ramsey”
4. Build An Emergency Fund
This tip is important to do because you never know when an emergency might come up. If you set aside a set amount or a percentage of your paycheck to your emergency fund each month, you will already have money in your emergency account to use when something unexpected comes up. My husband and I put a set amount every paycheck into a savings account that we don’t even touch! This has helped our family tremendously and we don’t have to worry about money so much.
5. Make More Money
If you are really struggling financially you might consider getting another job, a part-time job, earn more money on the side, or ask for a raise to help you out. About three years ago we were short on money and we had to make more money to help us pay off debt.
My husband and I found a janitorial job at an elementary school and we worked at night and we did this for about 6 months. Now, I will tell you, it wasn’t easy but doing so allowed us to pay off almost all of our debt in a very short amount of time.
Sometimes you have to make sacrifices to help you get out of debt. Whether that means deciding not going out to eat as often, getting a second job even for a short time, or cut any unnecessary expenses.
It is possible to get out of debt and get your finances under control. Finances don’t need to be a stressful topic and something to argue over. Getting out of debt and keeping your finances under control takes hard work but in the long run, it’s all worth it.
Take an hour a day every month to sit down and go over your expenses and income for the previous month and set up your budgets and action plans to get out of debt!