No matter where you are in life or what your financial goals are now, having control of your finances is critical.
If you feel like you are off the path of financial health, you can take several steps to help you get back control of your finances.
That way, you can be more successful with saving for retirement, getting out of debt, buying a new home or any other financial goal.
Table of Contents
- 1 Make a Budget
- 2 Retire Your Credit Cards
- 3 Educate Yourself
- 4 Start Cooking More
- 5 Be Savvy at the Grocery Store
- 6 Use Money-Back Apps
- 7 Cut the Cord
- 8 Save on Utilities
- 9 Pay Extra Toward Credit Cards
- 10 Start a Savings Plan
- 11 Get Insurance Plans in Place
- 12 Refinance Student Loans
- 13 Consult with a Financial Advisor
- 14 Start Investing
- 15 Use Investing Apps
- 16 Establish an Emergency Fund
- 17 Protect Your Financial Security
- 18 Take a Money Challenge
- 19 Find a Side Gig
- 20 Improve Your Skills Set
- 21 Open a Retirement Account
- 22 Take Advantage of Employment Benefits
- 23 The Bottom Line
Make a Budget
A budget is so important to financial health, but many people avoid creating one.
The key to making a budget is to list all your spending and income in detail. Then, you can look for ways to decrease your spending and increase your income.
With a budget, you can learn how much “extra money” you have to spend each month by calculating your cash flow. To do that, subtract your total monthly expenses from your total monthly income. (If you have a negative cash flow, you are living beyond your means by spending more than you make.)
Go into deeper detail with your budget by making specific plans for your extra money. For example, you can set a limit of $50 per month for new clothes or $100 for eating out at restaurants.
Each person will have a different budget that works for them. However, everyone can benefit from budgeting some of their extra money to savings.
Retire Your Credit Cards
One of the best ways to get out of debt quickly is to get rid of credit card debt.
When you have credit card debt, the high interest rates each month work against you. They can add to your total balance and make your next payments even higher. The credit card debt cycle can be hard to escape just by making minimum monthly payments.
The best first step to getting out of toxic credit card debt is to stop using your credit cards. You can try taking your credit cards out of your wallet and storing them in a secure location in your home. That way, you’re not tempted to use them on spontaneous spending.
Take control of your finances throughout your life by continuing to educate yourself on personal finance topics.
Experts have great advice for helping you find the best way to approach your money. Learn tips for buying your first home, saving for a child’s education or investing for retirement, among many other financial topics.
You can read books by financial professionals about how to reach your goals. To save money, borrow financial books from the library. You can also use audiobooks or tune into podcasts to listen to financial information instead.
Or you can read personal finance blogs to learn more about the financial issues you’re facing.
When you find a good online publication that connects with your needs, subscribe to its newsletter for ongoing financial advice. That way, you’ll get financial information delivered right to your inbox.
Start Cooking More
If your spending is getting out of control, part of the reason may be that you’re eating out at restaurants too often. It’s an easy expense to overlook.
One restaurant bill may not seem too high when you are paying it, but the cost of eating out can add up over time to a major expense. Several restaurant bills could quickly add up to hundreds of dollars.
Cooking at home is much more affordable. Get into the habit of cooking at home by creating weekly meal plans and listing the items you need. That way, you can also plan to save money at the grocery store.
Be Savvy at the Grocery Store
Choosing to eat at home is a great first step to saving money with a food budget. Take food savings one step farther by saving more money at the grocery store.
- buying items in bulk if you can store them correctly
- avoiding inside aisles with more expensive, processed food
- creating a list in advance and sticking to it
- using an app like Ibotta to give you cash back for grocery stores purchases
- ordering online so you are not tempted by in-store offers
Use Money-Back Apps
A growing number of apps let you earn cash back from buying products you would normally buy. Find an app that aligns with your spending to earn a little extra money.
Some apps that can help you get extra cash include:
- Ibotta: money back from purchases at grocery store and other stores
- Swagbucks: cash back after earning points from online shopping or other activities
- Rakuten: cash back from major retailers
Cut the Cord
Streaming services like Netflix and Amazon Prime are increasingly replacing traditional cable bundles for a good reason – they are less expensive.
If you want to reduce your monthly costs for entertainment, consider cutting the cord on cable and streaming movies or television shows.
YouTube, Hulu, Disney Plus, HBO Max are also among the growing number of options in streaming services.
Save on Utilities
One quick way to cut back on monthly expenses is to try to lower your utilities bill. You can do this in several ways.
Of course, you can adjust your thermostat lower during colder months to save on heat and higher in the warmer weather to save on air conditioning.
Here are other ways to cut back on your energy use:
- Seal air leaks around your windows and doors
- Regularly change air filters
- Update appliances to ones with energy-saving features
- Use a programmable thermostat at night or when you are not home
- Adjust your hot water heater to a lower temperature
Pay Extra Toward Credit Cards
If you’ve already stopped using your credit cards, try to make extra monthly payments toward your balance.
Paying more than the minimum monthly payment will help get you out of credit card debt faster. Extra payments will reduce the total principal, which in turn will reduce the total amount of interest charged each month.
Start a Savings Plan
Part of a healthy budget should include a plan for savings. Determine your savings goals and then how much you can set aside each month for them.
Automated savings tools your bank may offer can make saving easier. You can determine how much you want to contribute to your savings and how often you’d like to contribute. Then, you can let the technology work for you. It’s a way of putting your savings on cruise control.
Other apps like Acorns can help you save by rounding up the price of your purchases and investing the difference.
Get Insurance Plans in Place
Insurance plans can go a long way to keeping you on solid financial ground. You can make monthly payments toward an insurance plans to protect your assets from loss.
Consult with a professional advisor for help getting the best insurance plans for your vehicles, home or valuable goods.
If your employer doesn’t provide health insurance, consider buying this as well. Even though health insurance may seem expensive, it can save you from financial ruin from an unexpected event.
You can also buy life insurance plans so that your loved ones will not suffer financial strain if you pass away.
Term life insurance plans often have lower monthly payments, but they only cover a specific time period. Whole life insurance plans may require higher monthly payments, but they offer death benefits for the whole life of the insured person. With whole life insurance, you can also save and invest the contributions, or even borrow against them.
Refinance Student Loans
If you have student loans, you may feel like they are controlling your finances. Having too much student loan debt can affect your credit score. It can prevent you from taking major life steps like buying a new home or a new car.
Take control of your student loans by refinancing them or consolidating them. Find student loan options that can offer a lower APR than your current loan. That way, you can save money on the total cost of the loan and perhaps lower your monthly payment amount. With a lower interest rate, you can pay your student loan off faster.
If you are struggling with your monthly cash flow, refinancing your student loan to pay smaller amounts over a longer amount of time can. With many lenders, you can enroll in automatic bill pay to reduce your interest rate.
One small trick to pay off student loans is to make half your monthly payment every two weeks instead of your full monthly payment once per month. That way, you end up paying a little extra each year.
Consult with a Financial Advisor
Financial advisors can offer specific strategies for taking control of your finances that fit your own situation.
They can help you develop a financial plan that includes setting goals and creating a roadmap to achieve them. Financial plans are a bit different than budgets because they focus on the long term.
When you’re looking for a financial advisor, make sure they will offer personalized advice and not just general tips. Connect with an advisor who has a good reputation and will take the time to fully explain their fees and services.
Investing is a way to put your money to work for you and a great strategy for taking control of your finances.
You can start investing with any amount of money. Some assets you can invest in include:
- Real estate
- Exchange-traded funds
- Mutual funds
Some investments are riskier than others, but they may carry the potential for more gains. Work with a financial professional to help you determine an investing strategy that meets your financial needs.
Use Investing Apps
Investing apps are making investing more accessible and more affordable to beginners. You can find an app from many of the major online brokers.
You can also use apps like Robinhood, Wealthfront, Investr and Betterment to start investing. Transfer funds from your bank account, then purchase the stocks you’d like to include in your portfolio.
Most investing apps now have the same security features as traditional financial institutions.
Establish an Emergency Fund
Having an emergency fund in addition to your general savings can help you stay in financial health during difficult times.
If you lose your job or face an unexpected expense like a hospital bill, you can use emergency fund money to pay for your bills without going into debt. Setting aside money specifically for emergencies can keep your long-term savings plans on track.
Financial experts often recommend that you save at least three months’ worth of expenses in an emergency fund. Of course, the more money you have saved for an emergency situation, the better.
Protect Your Financial Security
As you build wealth and establish credit, you should also protect your financial security. Criminals are getting increasingly savvy about finding ways to steal your identity, which can wreak havoc on your finances for years.
Use secure passcodes for your account that don’t include common words. Try an online password generator for suggestions.
Monitor your financial statements and credit reports regularly for irregularities. If you see any, report them to your bank or credit reporting agency immediately.
If you lose your credit card, report the loss right away so that your bank can freeze spending and issue you a new one. Oftentimes, a bank will not hold you responsible if you are the victim of fraudulent spending.
Finally, avoid providing personal information to anyone who calls you or requests information via email. Only provide personal information when you reach out to your bank yourself.
Take a Money Challenge
Even if you have a well-planned budget, a money challenge can be a fun way to try to reach a financial goal. You can compete with friends or set up a personal challenge.
Money challenges come in many forms, but the idea is that they make the mundane chore of saving money into a game. For example, a 52-week money challenge could require you to put aside $10 every week for a year. By the end of the year, you will have saved $520.
Another version of the 52-week challenge works with you setting aside $1 the first week, $2 the second week, $3 the third week and so on. At the end of 52 weeks, you will have saved $1,378.
You could do a “No Spend” money challenge in which you don’t spend money on non-necessities like eating out or new clothes for a specific time.
Find a Side Gig
If your monthly income is not quite enough to pay your monthly bills or if you are having trouble saving for a big purchase, consider a side gig.
Side gigs provide extra pocket money to supplement your normal income. Find a side gig that can accommodate your schedule as well as fit your interests or skills set.
Some popular side gigs include:
- driving for Uber or Lyft
- selling things on sites like eBay or Etsy
- providing freelance services like writing or graphic design
Improve Your Skills Set
Even if you have a secure job, it pays to keep your skills set up to date. Updating your current skills and learning new skills can help with your job performance. Perhaps you could land a promotion.
If you lose your job, having a diverse skills set can make you a more attractive job candidate. You can also use additional skills for side jobs to earn extra income.
Improve your job skills by taking training courses through your employer if your employer offers them. Or enroll in courses at your local college. You will also find many opportunities to gain additional professional certificates with online learning options.
Open a Retirement Account
Retirement accounts can help you get control of your finances in several ways.
First, retirement accounts offer tax advantages that can save you money. You can deduct contributions to a traditional IRA or 401(k) from your taxable income each year. With Roth IRAs and Roth 401(k)s, the tax advantage is during your retirement years when you can withdraw your contributions and any profits as tax-free income.
Second, if your employer offers matching 401(k) funds, a retirement account can help you earn “free money” when you make contributions (up to a certain amount).
Finally, simply having a separate account for your retirement funds can help you avoid spending that money.
Take Advantage of Employment Benefits
Use benefits that your employer offers to help you get on good financial footing. One of the best benefits an employer can offer is a matching 401(k) program. If you employer will match your retirement account contributions, aim to contribute at least up to the maximum that they will match.
Many employers will provide financial counselors to their employees. Professional advice about how to set and achieve your financial goals can help you avoid costly mistakes.
Employers may also offer benefits like discounts to gyms or wellness programs, medical insurance, free meals or free childcare. These benefits can all help your financial situation if you take advantage of them.
The Bottom Line
No matter what your financial goals are, managing your money is key to achieving them.
With the suggestions above, you have a wide variety of ways to take control of your finances, from earning more money to finding better savings solutions. There’s no better time to start than right now.
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