It’s a struggle isn’t it? Money comes in and goes out again. Paycheck to paycheck we suffer. We look at how much money we are making and wonder, “Where does it all go?” I’ll tell you where it goes, right out the window!
No matter if you make a few bucks a week or a few million, it is still a struggle to manage your money wisely. Even though you may have an aptitude for it, we do not come out of the womb knowing how to manage our money. Many of us didn’t start making any money until we were well into our teenage years or even our twenties. And if we did, our parents probably didn’t advise us much on what to do with the money. Except maybe to tell us to not to spend it on frivolous things.
Our schools didn’t help us much either. Most schools lack programs to teach kids about managing their finances. If they do have them, it is most likely taught in a basic math class or a home economics class. If we were lucky enough to have some training, we probably forget most of it because we didn’t or couldn’t apply it right away.
So what is a person to do? Say you want to get started on managing your finances wisely, but you don’t know where to begin. Here are 11 steps to better finances that you can begin applying right away…
- Just start saving. Easier said than done, right? Well I guarantee you that you can find $10, $20, maybe $50 extra dollars a month to put away into savings. Get a plan together and make it automatic. Ask your employer if they can automatically deposit a certain amount into your savings. The Simple Dollar also has a list of 100 ways you can start saving now.
- Decide you want to have better finances. Maybe this should have been the first one in my list, but you are going to start saving now anyway, right? Moving in the right direction requires a decision. That decision comes after you discover just how fed up and tired you are with not having any money. You can’t even begin to step in the right direction without the determination and motivation it takes to succeed.
- Make a budget. Really? You are telling me I have to work at this? Yes, why yes I am. 😉 When I first decided that I was going to put myself on the road to better finances I learned about this idea and hated the thought of it. Why? Because I am lazy, plain and simple. I really didn’t want to sit down and spend hours doing a budget. Well maybe it didn’t take hours, but I really didn’t want to do it. I eventually gave in to sound advice and I am thankful I did. You can’t even begin to have better finances unless you know where your money is coming from, and more importantly, where it is going. Learn to budget, make a budget, and use it on a regular basis.
- Join a credit union. When I finally joined my credit union, and experienced how great it was, I couldn’t help but think about why I didn’t do this sooner. I love my credit union because they are so friendly, and helpful, and nice, and I could go on… Plus, you can save a ton in the loan department by going through a credit union. You see, credit unions are non-profit cooperative owned institutions. Yes, you own your stake at a credit union. You have a voice. It’s pretty nifty. The best thing of all is that the profits they would make if they were a bank automatically come back to you in the form of lower interest rates on loans, and higher savings and CD rates. Now that’s something you can write home to mom about!
- Get others involved. It doesn’t hurt to have help. Tell you friends, family, and most importantly, your significant other, of your intentions to improve your finances. Hopefully they are supportive of you and will encourage you to make the necessary changes. Also, don’t be afraid to ask for professional help. Go to at least three different professionals and decide who will be able to truly help you out. Check out http://www.mymoney.gov for more resources.
- Check your money-emotion connection. When most people think they have money problems, they actually have emotion problems. The way you were raised, your job, your friends, your current lifestyle, all affect how you spend. These are emotion issues, not money issues. So start thinking of your overall money philosophy and how you got to be where you are at today. Be honest with yourself. Know what triggers you to spend. Your cravings and urges determine a lot of your money habits. Don’t let them. The first step is in recognizing the emotions that cause bad financial decisions. The next step is learning how to deal with them. The last step is putting what you learned into practice.
- Start investing. This is a huge topic that most people don’t understand. So start learning. There are some simple ways to start. Max out your 401k. Start a Roth IRA. Invest in a stock or two that you know will be around for the long term like Coca-Cola and hold onto them. Consider a no load mutual fund. You should even consider investing in your education or investing in a part-time business. This topic can be really overwhelming for a beginner. The wise thing to do is to start out with a small investment, take it slow, think long term, and learn as you go.
- Eliminate Credit Card Debt. Your ultimate goal should be to get rid of all debt, but since we are taking little steps, you should focus on credit card debt first. Why? Because it is revolving debt, the worst kind. Other types of debt are normally categorized as installment debt. Installment means you pay in installments and there is a pay off date. In other words, installment debt ends, revolving debt doesn’t. Since your ultimate goal should be to pay off all debt, you should consider getting rid of revolving debt before it hits you on your way out the door. (Pun Intended) 😉
- Know the value of money. Most people don’t. It is to your advantage to not be in that group. There are a couple things you should understand. Like the time value of money and inflation. Compound Interest. What your REAL hourly wage is. And so on… Study. Learn. Take advantage of the knowledge that successful people use to manage their finances wisely.
- Start now. Ok. You have been wishing you were in better financial waters, but have you done anything about it? Thinking won’t help you much unless you act. A dollar saved today is worth much more than a dollar saved even a year from now. Paying off your credit cards today can saved you thousands of dollars tomorrow. Starting this whole process is the hard part. So get the hard part over with already!
- Repeat. This is all rather boring stuff. Investing is boring (unless you are a day trader). Saving is boring. Paying bills is boring and sometimes hurts. Building a budget is boring. Learning about all this stuff can be boring too. You know what though? Doing all this stuff helps us enjoy life more and helps us to do more of the not-so-boring and fun stuff we want to do. 😉
If you want to have a better financial future then start small and start now. There is no better time than the present. Take some or all of the little steps above and begin today. Also, if you have any other ideas of little steps to improve your finances then please add them in the comment section below.
…If you liked this article and would like to read more please subscribe using the email form above and to the right. Also check out my 11 Little Steps to Better Health. Thanks!…
Lastly, this article was included in the Carnival of Personal Finance at The Digerati Life.
Enjoyed this one! Thanks for mentioning my article. I like what you are doing here at Insight Writer.
Nice writing. You are on my RSS reader now so I can read more from you down the road.
Allen Taylor
Hi Jason,
Thanks for taking the time to comment. I appreciate the comment about how you like what I am doing here as well. Helps me to know it is worthwhile. I know your site is great so hopefully my readers get a lot out of this AND your site.
Cheers,
Jeremy
Hi Allen,
Thanks for stopping by. You know. A visitor is great, but a subscriber is way better. It is a huge compliment when I see someone subscribe because it means I am accomplishing my goal of helping people and they find my writing of value. I look forward to reading more on your website as well.
Cheers,
Jeremy
Jeremy,
Excellent tips for finances. The one thing that I need to do is start investing. It scares me though. Risk scares me. Plus… I am actually unemployed right now. Kind of hard to save when you have no income, lol.
Also, thanks for your comment! I love bloggin and I am very pleased with the traffic I am getting. The internet is such a great way to reach a large audience. I would love to collaborate with you sometime. I will definitely put my thinking cap on for possible guest posts. And you are always welcome at my blog. In fact I would be honored if you would write one 🙂
– Jack Rugile
Simple Sapien
Simple Sapien’s last blog post..Thank You Simple Sapien Readers!
Hi Jack,
Thanks for the compliment. You know, I noticed your guest post page right after I left the comment. I will put my thinking cap on as well and will have something soon. I’ll catch up with you here soon.
Cheers,
Jeremy
Very helpful post, Jeremy. I always feel like our hard earned income just evaporates every month. I’m currently working on getting rid of some of the unnecessary bills and paying down on the little bit of debt that we have. Today I was just thinking about how we really need to make and stick to a budget. This post is just one more reminder of the importance of doing so. Thanks for the insight! Eric.
Hi Eric,
You are welcome. I think that sticking to a budget is much harder than making one. Hope it works out for you.
Cheers,
Jeremy
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These are awesome tips, Jeremy! I’m very frugal myself and would much rather shop at the Goodwill then spend hundreds – or even thousands – on an outfit.
I commend you for getting your finances in order now at a young age. You’ll enjoy your later years without having to worry about money. Definitely worth a stumble – off to review it now! 🙂
*smiles*
Michele
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I survive on a budget. I don’t get over time but I may get a bonus from time to time.The bonus is invisible until I see it in my saving account.I have this built in mechanism that would rather see more figures in my bank notices then designer clothes or fancy gadgets that are going to be out of date in a matter of months.You have to have self discipline and be particular when it comes to money.Invest wisely.Avoid too many credit cards and limit the usage.The interest alone kills.When something catches your eye while shopping walk away if you hear it calling to you from afar go back and look at the piece tag and ask your self if you really need this.Most of the time ( I don’t like shopping one bit) the deduction of the price lowers my checking account to the point the item goes back on the rack and I walk away with pride.Many people are spoiled by their parents. When they are out on their own finally they have to learn the hard way.You have learn to live within your income.avoid takeout or delivery and when you actually have saved money say on food for the week put it aside for a rainy day.Very informative post.I really like it.Bunny got Blog’s last blog post..A Beautiful Dayâ?¦ Isnâ??t It?
@ Michele – Thank you. I dont know how I became that way but Ive always been that way. Maybe its all those books I read when I was a teen. 😉
@ Bunny – Thank you for taking the time to write all that. Thats a lot of good advice that comes from personal experience it sounds like…
-Jeremy
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Good to see this post get resurrected given the general uncertainty in the world economies. Not much we can do individually about the bigger stuff … but we can look after the day to day money in and and out in our lives.
Personally I think number 6 is by far the most important .. and interesting. I mean who really can get excited about preparing a budget??? But looking at my emotional relationship with money .. now that can be fascinating stuff. I have a theory that most of us have big inner conflicts when it comes to money. On one hand we all like to have and spend money and we’re bombarded with media images that encourage us to earn and spend. I mean that’s what makes us successful and happy .. right??? (tongue in cheek). On the other hand we’re brought up to believe money is bad, we shouldn’t get paid for ‘doing good’, harder for the rich man than the poor man to get to heaven etc.. All other people’s messages!
So I think its critical to find our own relationship with money.
Ian
Ian Peatey’s last blog post..7 steps to transform our labels
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Great post,
Here is a tip, create a standing order with your bank and place so much a month into an ISA or savings account. Pay yourself first. I do, and I get rewarded first, people may work hard in jobs. Make sure you get what you deserve first, the goverment takes a chunk of your money before you even get it.
How secure is a penison or a 401k? Aren’t those taxed at the highest rate when you withdraw your money?
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Very good advice. A lot of people still don’t realize that by making small, simple changes in their habits, it will affect their financial status in the end.
A word of advice regarding bulk purchases though. There are times where bulk purchases are not always cheaper, so price comparisons need to be done.
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