Everyone wants to manage their money better, but few really get a handle on their spending. That is not because they are lazy or inept, it is usually because they do not know where to start. Here are three basic tips that may help you get a hand on things.
- Track Spending…Many people advocate this as a secondary step, but knowing where your money goes is a great way to see where you are wasting it prior to setting a budget. Track you spending for at least a month to make sure you have pretty consistent information.
- Set A Budget…You must balance income with expenditures. Add up your monthly expenses (groceries, transportation, rent, bills) and allow for a little bit of spending money. There are plenty of budget worksheets available for free online to help you get started.
- Live Within Your Means…The first two steps will help you learn what your means are and prepare for living within them. You must find a way to spend 90% of your income each month, or less, and place the rest in savings for emergencies.
These three steps are very basic. There will be a follow up post shortly that will go more in depth. Hopefully, you will come back to see us.