Manage your money better with three basic steps
Being good with money isn’t about how much you make—it’s all about how you plan. Whether you’re handling finances for yourself or for the whole family, what you need to be good with money is everyday management.
With help from Better Money Habits, you can learn three basic steps for getting your finances in order, no matter what your income is:
- Create a budget
And stick to it! Think of your budget as a guide to your financial and personal goals. If you find you have trouble keeping your spending habits in check, a budget can be an important tool to prevent overspending by helping you see and understand exactly where your money is going.
- Set savings goals
With your budget in place, reaching your savings goals will be that much easier because you’ll know exactly how much extra cash you have available each month to allot to your goals. Not sure where to start? Try kicking of your savings goals with an emergency fund. Building up an emergency savings can help you better manage those unexpected expenses—like a flat tire, medical bill, or loss of a job—and avoid going into debt when life throws a curve ball. No borrowing required!
Starting small can lead you into bigger and brighter financial goals for your future, like saving for a car, for college, or for a home. The most important part is getting the habit started.
- Tackle your debts
You’ll want to start by no longer adding to the debt you already have. Cut up or lock away those credit cards you’ve been using to avoid adding any new and unnecessary charges.
It’ll also help to know what your debt is costing you each month by identifying the principal amount, or the debt you’ve accumulated, and the interest accumulating on that debt. Once you know how much your debt costs, you can better plan for chipping away at it one on-time payment at a time.
Managing your debt and your savings go hand in hand. If you find you have debts with high interest rates, it might make sense to focus on paying it down at the same time as, or even before, you build your entire emergency fund.
When put into practice, these three simple steps can have a big impact on your financial future. Curious to see how your spending stacks up? Click here to find out.
Need motivation to stick to your savings goals? Let America Saves help! It all starts when you make a commitment to yourself to save. Take the first step today and take the America Saves pledge to save money, reduce debt, and build wealth over time. And it doesn’t stop there. America Saves will keep you motivated with information, advice, tips, and reminders to help you reach your savings goal. Think of us as your own personal support system.
- Written by Tammy G. Bruzon
- Category: Blog
- Published: 08 December 2016