4 Tips to Get Your Finances Under Control
Setting up a budget and sticking to it isn't rocket science, these are just a couple of tips to help you take control of your money.
We all stress about money, but many of us just stress and don’t do much about it. It doesn’t take a lot to organize your finances and start saving for important purchases such as a house or for retirement.
These are just a few tips you can follow to start saving money and hopefully have less anxiety about your financial future.
1. Set Up a Savings Account
This is something that everyone has heard, you need to save money. And it’s usually easier said than done, but this doesn’t make it any less true. Setting up a savings account can be beneficial in many ways, it can be used as an emergency fund for unexpected events; such as, car repairs or if you suffer a personal injury and can’t work. Your savings fund can help you until you recover damages or can go back to work. Experts recommend saving at least three months’ worth of your net pay. Save this money and keep it there, don’t spend it unless you really need it. It’s useful to think of it as money you don’t have; that way, you’re not tempted to spend it on a shopping spree or a tropical vacation.
2. Create a Budget
This step is a bit obvious, but in order to save money and keep your expenses in check, you need a budget. If this seems overwhelming to do on your own, there are many apps that can help you; Mint, Digit, and Prism are just a few. Having a budget will help you keep track of your expenses and see where you can cut back, organize your bills, and plan for your savings account and retirement fund.
3. Eat at Home
According to data from Business Insider and the Bureau of Labor Statistics, in 2017, people 25 to 34 years old spent an average of $3,416 eating out. That’s $284 a month that could be better spent paying off loans or saved for retirement. If you find yourself going out for lunch every day of the week, try meal prepping on the weekends. You can plan your meals for the week and buy groceries according to your meal plan. This doesn’t mean that you should never eat out, try to cut back to only once or twice a week; that way if you’re feeling too tired to cook or just want to enjoy a night out at a restaurant, you’ll still be saving money and staying within your budget.
4. Focus on Paying Off High Interest Debt
Millennials are usually dealing with two types of debt: credit cards and student loans. Financial experts recommend you focus on paying off high interest debt like credit cards; which, according to Credit Karma, have an average APR of 15.09% compared to 4.53% average interest rates for federal student loans. Once you’ve managed your high interest debt, you can concentrate on paying off other, lower interest debts by paying more than the minimum payment and calculating budget accordingly.
Getting your finances in order may seem like an impossible task, but if you're committed and organized, it can be done. To keep your finances in good health, you will probably have to make sacrifices and a couple of changes to your lifestyle; but if it will help you sleep better and reduce your stress about the future, I believe it’s worth it.