My decision to write about tips that can help you gain control over your finances couldn’t come any sooner. Why? Because, as we come close to the end of the year, the last thing anyone wants to discuss is Money.
It’s November, Black Friday and Christmas are coming around the corner. We are all excited to go shopping for our loved ones and ourselves, so who wants to think about budgeting?
Well, the reality is that our wallets and bank accounts might agree that there are some important decisions to be made.
Did you know that 34% of Americans have no idea about how much they pay in debt from their monthly income and do not know their credit cards’ interest rates?
Taking control over your finances today will bring you more happiness and peace of mind, and help you maintain a good and healthy lifestyle you can afford without drowning in debt.
So, how can you achieve this goal?
Start by trying out these small but meaningful changes to improve your financial situation.
Table of Contents
6 Amazing Tips To Help You Gain Control Over Your Finances
1. Be Real With Yourself
First simple change you need to make today in order to gain control over your finances is to accept where you are on your financial journey.
We have all been in situations where we think ignoring the problem could be the best option. However, as we all know, sweeping things under the rug does not solve the issue but makes it worse.
Same thing with money, you cannot keep ignoring your debt, your credit score or the tremendous expenses if you want to gain control over your finances.
I used to be that person who ignored their account statements. I hated checking my bank account, especially if I knew my balance was getting low , as if money would magically appear if I didn’t look.
But I knew that if I wanted to gain control over my finances, my mind set must change. I started building a friendship with my finances.
I am now checking my accounts weekly instead of monthly. This helped me know if I am spending within my means or stepping out of my budget.
It has also helped me keep up with my savings goals.
2. Set your Financial Goal
As I mentioned earlier, not so many people know where their money is going. It is essential to know your monthly income, expenses, debt, and savings then come up with a plan to set up a budget that works for you.
Whether you are employed or not, it is advisable to set a goal that you can focus on. Instead of setting 8 goals that most likely will not all be attained, start with one main goal that you can work on daily to help you achieve other financial goals.
Not saying that having many goals is meaningless, but we usually get distracted if we have so much on our plate. It is why you need one main goal and a few more secondary goals related to your main goal.
For example, say in 5 years you want to pay off a $5,000 loan, buy an $ 18,000 car, and set aside $ 35,000 in your saving accounts.
Your main goal should be getting a higher paying job or finding ways of earning extra income that will help you pay down your debt and increase your savings.
Once achieved, set your second goal to be cutting down your expenses, so you have more disposable income.
Maybe that means avoiding using credit, trying “no-spend” days, and sticking to your plan of getting out of debt.
3. Get Organized
One of the main reasons why my finances were out of control was not knowing whether I paid my bills or not.
I could not remember the bills’ due dates, be it an electric bill, a credit card bill or a cable bill. It became difficult to keep track of what got paid, and I kept receiving late fee notices and interest rates going up on my credit cards.
I was in a FINANCIAL MESS!
So I sat down and came to terms with my reality. This mess had to be cleaned up and organized.
Gaining control over your finances involves a skill of organization, and here a few changes you can make towards your financial goal:
- Sort through your mail daily; make files and organize bills, tax-related papers, and important documents.
- Let payday be the time you pay bills (and include savings as a bill).
- Depending on when you get paid, monthly, bi-weekly or weekly, plan your bills around the time you get paid to not waste money on non-necessities like dinning out, or buying clothes.
- Savings should be accounted for as a bill; otherwise, it will be another thing on your to-do-list that you will never get to.
- Set up automatic payments from your accounts so you don’t forget important dates like I did.
- Bills must be paid monthly within their due dates to avoid late fee charges or avoid your bills from being sent to a collection agency that will lead to a drop in your credit score.
4. Learn smart Shopping habits
To gain control over your finances, you have to change your shopping habits.
We all love nice things now and then; however, sometimes these things become the biggest obstacle to our financial success. Getting back to budgeting, whatever you spend on shopping should also be included in your monthly budget.
You should be able to afford it, and it should actually bring you happiness. But is this happiness long-term?
It is why I would encourage you to say no to impulsive shopping and exercise a “sleep on it” policy before any purchases. If clothes, shoes, or bags are your weakness, include $100 or $50 in your monthly budget and stick to it.
Maybe you want a $ 300 purse, but your monthly shopping budget is $50. For the next 6 months, you will not be shopping around and spending the $50 on anything else.
Instead, you will be saving that money until you get the $300.
In case you are shopping around for electrical appliances like TV’s, cameras, or laptops. You will find some of the best deals on Black Friday. So save your money and wait for this time of the year for such purchases.
Don’t forget to look around for coupons or discount promotions in the mail or your email. Gain control over your finances by Living within your means and build some WEALTH.
“Only buy something that you’d be perfectly happy to hold if the market shuts down for ten years.”
– Warren Buffett
5. Get rid of Cable TV
For years, cable television was the only way to watch quality TV shows, movies, and games. I Spent money on Comcast without hesitation.
And back then I had all the time in the world to watch almost anything. I had my favorite shows, their show times, and all the channels on my fingertips.
Fast-forward to today; I have a full-time job, this blog to run and so many other things are going on. I barely have time to watch any television. I rather watch a movie, a few good shows or watch YouTube videos.
Why pay those large monthly fees when you have options like Netflix, Amazon Prime, Hulu, and many more online streaming outlets?
Find different ways you can cut down your expenses if you want to gain control over your finances.
Whereas the monthly cable bill on average, is about $150, investing in a smart TV. Spending from $8.99 to $25 a month, for basic or standard streaming plan might be a cheaper option for you.
You will be cutting down your expenses by 93 percent or $90 that can go to your savings.
6. Stop comparing yourself to others
Stop comparing yourself to everyone around you if you want to gain control over your finances. Usually, we compare ourselves to our family members, friends, colleagues at work, neighbors, and celebrities on Instagram.
And most of the time, when this happens, we are searching for what we are missing in our lives.
But is it meaningful to make comparisons to your colleague at work with who you do not share a household with or any sort of background? The answer to this question is NO!
It is very easy to see people who go on vacations every six months as wealthy. But we miss the details in between.
It could be that the vacations were paid with a credit card or maybe a company is sponsoring those trips rather than the individuals affording them.
A Credit Karma survey indicated that in 2019, 42 % of Americans went into debt due to their summer vacations and travel. This shows that only a few people who can afford vacations without getting into more debt.
A friend with a new car only tells you little about the financial status of that person. Maybe it was a goal they have been saving for many years.
It is essential to know that your needs are different from your friend regardless of whether you are in the same age group or the same income bracket.
Comparing yourself to that person discourages you from focusing on the path you should be on. Instead, It makes you less satisfied with what you have.
So, here is a question for you.
What meaningful changes are you trying this year to improve your financial situation and gain control over your finances? Let me know in the comment section below about what you have achieved with these changes.
Please read more here, for useful tips on how to manage your finances.