How to Get Your Finances In Order

Taking the time to be organized and get a hold of your financial responsibilities is no mean feat. If even thinking about your bills gives you anxiety, you may be surprised by how taking control of your situation will ease your worry. Now the question to answer is, "how in the world do I do that?" Keep reading for some tips on how to get your finances in order.

Go Through Your Bank Statements

The first step in understanding your budget is figuring out where all your money is spent. Print out the last few month's bank statements, and grab some highlighters. Choose one color of highlighter to represent each of the following categories:

• Gas and groceries
• Utilities and car payments
• Mortgage/rent, credit card payments and insurance
• Extras (i.e., gym memberships, shopping, haircuts)

Once you have broken down your spending into classifications (which are completely customizable), run through your statements, highlighting as you go. This technique will help you visualize where you are losing the most money. If you need to cut down on spending, this is an excellent opportunity to see where you can do so. Maybe you look into applying for new auto financing, or you give yourself an allowance for your extras to avoid breaking your budget.

Set Reminders For Your Bills

Another cause of financial stress is the unknown— short for: you aren't staying on top of your due dates. Paying your debts on time is a huge factor that could potentially damage your credit. Still, you have a never-ending list of things to do; there is no wonder why you have trouble remembering when to make your payments. The good news is, there is an easy solution to this issue, and there are many ways you could go about a fix. You could set reminders on your phone or buy a planner to write down your obligations each month. It also doesn't hurt to turn on notification from your credit card and insurance companies to let you know you have a balance due within the next few days.

Save an Emergency Fund

The hardest part of trying to become financially stable is knowing where to start. No matter your goal or what kind of debt you are dealing with, you need to start saving for an emergency fund. This way, you won't get yourself any deeper in the hole if you lose your job or have to deal with extenuating circumstances. Set a goal of putting away at least one month's living funds, including all your bills and money for food. You can put this money into a high yield savings account, so you can continue to grow those funds. Saving cash will give you peace of mind knowing you are still able to provide for yourself and your family in the case of an emergency.

Build Your Credit

Your credit scores play a huge role in your ability to qualify for big purchases. Even if buying a home isn't on your radar for the near future, you should still put yourself in the best position to give yourself that option one day. Your credit is also considered in your rental application and helps decipher electricity rates. All the same, it is safe to say that monitoring your credit and putting together a plan to make adjustments is a great way to make your future a priority and make your life much more manageable— all things that come from having a firm grasp of your finances.

Conclusion

It isn't easy to dive into your finances and change your spending habits, but the benefits are unparalleled. Can you imagine how much better you would feel if you didn't have that little voice in the back of your head telling you there is something that you need to worry about? With as many things that require your attention in life, there is no better breath of fresh air than the one that means less stressing over your finances.