If I asked you exactly how much is in your bank account right now, would you know? What about if I asked how much you were spending each month? How is your budget broken up? What is your monthly savings plan?
If you can’t answer these questions and are struggling to keep your finances consistent, you need a plan! Keeping track of your finances can be easy as long as you find a plan that works for you.
Create a Budget
Making a household budget is the centerpiece of your financial planning. Without a budget, it will be easy to accidentally overspend on the wrong things. When you start your budget, work in retrospect to see where you need to improve.
Look at the recent past few months’ finances and see how much of your budget went where. You may be surprised to discover that your little entertainment fees add up and are eating a huge chunk of your budget.
Use your past mistakes to make a solid plan for a better future.
Track all of Your Finances
Yes, all of them. Even little things can add up fast over the weeks. That $4 coffee you get every morning totals $120 a month.
Sometimes it’s the little things that can be draining your bank account, and you probably don’t even notice.
If you’re looking for things to cut, tracking your finances will make it easier to see where you can cut out smaller things.
Make a Saving Plan
If you want to save money, congratulations! You’re normal. Everyone wants to save money, but without a solid plan it will be difficult.
Even when you’re tracking your finances and have a set budget, it can be very easy to spend on little things here and there. If you consistently do that, you won’t be saving any money.
Try making concrete plans, such as only buying store brands at the grocery store or only going out to eat once a week. Try your best not to make exceptions because saving must be a habit!
Don’t Splurge Your Extra Money
If you stick to your plan, you will definitely be saving money and seeing surplus at the end of each month. Don’t consider this extra money.
Instead, put it in a savings account. Use this account to start building an emergency fund. Bad things will inevitably happen. Cars break down, people get sick, things get lost.
When these things happen, don’t be stuck charging up debt to a credit card. Stick to your saving plan and feel confident about your financial position.