World Financial planning Day: Take Charge of Your Finances
Living without a financial plan can make it hard to reach your goals. It can also add a great deal of anxiety to your life. Without a financial plan or budget, it’s much harder to know where your money is going and what purchases you can afford. You may also not know how much you have in your retirement savings or whether you’d be able to cover an unexpected health care expense. In other words, not having a financial plan makes you feel like you’re not in control of your money or your future.
Getting your finances in order is the first step to helping you get back in the driver’s seat and in control of your money.
Developing a financial plan isn’t hard. Speaking with a financial planner is helpful, but here are some things you can also do on your own.
Set a budget
The first step to getting your finances in order is understanding and tracking your monthly expenses. For most people, essential expenses include:
- Rent or mortgage payments
- Internet and cellphone costs
- Credit card payments
- Car payments
- Gas or commuting costs
- Insurance premiums
- Student loans
- Utilities, including water and electricity
Start by making your list of essential expenses. These are costs you need to cover each month. If you feel like your expenses are too high, think about ways you can reduce your bill. For example, you could change insurance plans, switch cellphone carriers or cut back on grocery expenses by shopping at a discounted store.
Once you’re in a good place with these essential expenses, make it easy on yourself and set up automatic monthly payments, including any credit card bills. This way, you won’t miss a payment and incur late fees.
From there, take a careful look at your less essential expenses. Investigate where your money is going and whether or not those expenses are really worth it. Are you still paying for a subscription you don’t use? Are you spending too much on coffee each month? Work to eliminate these expenses. You’ll be surprised how much extra money you’ll save.
Once you have a handle on your expenses, set a monthly budget and stick to it.
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