Your financial life is one of the most important aspects, but all too often we neglect it to the point of disrepair. Most people float along in their finances never really paying attention until debt becomes a problem or they find themselves unable to purchase what they want. When it comes to managing money we could all use a little improvement in our skill set.
Setting Up For Success
Money management doesn’t come easily for everyone and most of us need a little boost when it comes to changing our old habits. The most important thing to remember about money management is that it is an ongoing process that requires your attention on a weekly basis.
First, set up a budget if you haven’t already. This means taking the time to outline your expenses and specifically allocate how much money you will be putting towards debt accounts each month. Be sure to set a limit on non-essential purchases to avoid overspending.
Next, keep track of your spending. There are many online tools or Smartphone applications that can help you track your spending and stick to your budget. Whether you check your online bank statements each week or use a budget monitoring software like mint.com, the idea is to make your money a priority in your thoughts.
Also, set financial goals for yourself. Set both short term and long term goals to ensure that you have a plan for your money before you even receive it. Short term goals include things like reducing your spending on a non-essential item over a period of two to three months; whereas long term goals include paying off a debt account within a year or saving x amount of money this year.
Last, know the signs of bad debt. Avoiding debt negotiations and bankruptcy takes awareness and it is important to recognize when your debts are getting out of control. If you can’t afford to make a payment, find yourself only able to make minimum payments each month or need to borrow from one source to pay another, you may have a more serious financial issue on your hands.