Unfortunately, learning how to manage your finances or monthly expenses isn’t a course usually taught to us in school. We have to learn as we go — often through trial and error (emphasis on the error). If you’re struggling to stick to a budget or find a positive balance in your bank account every month, here are some simple tips and tricks to help get you back on the right path.
- Keep Track of Everything You Spend
The first step to financial management is to become conscious of where your money goes every week. For a few months, keep careful track of every dollar you spend, whether it’s on rent, food, entertainment, or car payments. You may be surprised at your own results. Getting an idea of your current monthly expenses will help you find ways to cut down on unnecessary spending.But, be honest, if you don’t think you’ll actually keep track, there are a number of apps that will keep track of all your spending habits for you.
- Find Ways to Make Cuts
Once you have the data, take a good hard look at your spending habits to find small changes you might make that could lead to big savings. For example, bringing your lunch to work is a lot more cost-effective than eating out every day. And do you really need subscriptions to cable, Netflix, Hulu, and HBO GO all at once? Perhaps shop around for a discount gym membership. More than 40% of American families spend more than they earn; don’t be one of them.
- Set a Goal
While you might want to save up for a new house or car, your first goal should be getting out of debt. There are an average 3.5 credit cards for every person in the U.S., and Americans collectively owe over $11.9 trillion in debt payments. While paying off that credit card debt or student loan payment may seem like an impossible task, finding ways to reduce debt will help free up the rest of your money in the long run.
Managing your monthly expenses doesn’t have to be like pulling teeth. More often than not, simple awareness of your spending is enough to evoke change. While setting and sticking to a budget is a challenge, it’s one that will benefit you in the long run.
You can take control of your financial situation with a little bit of planning and willpower.