Tired of watching your hard-earned money slip between your fingers? If you’re spending more than you earn, or you know you’re indulging way too often, it may be time for a financial detox. Assess your finances and prevent your money from burning holes in your pockets with these tricks.
Reasserting your control over your cash is easier than you may believe, but it you’ll need to plan ahead. Determine how much money is going in and out through your monthly budget and trim back where you can. Stockpile some of your earnings into a savings account to combat anything life gives you. Want to know more? Keep reading to take control of your money.
Kill the Poison in Your Finances with These Detox Methods.
Determine Your Income
First, you need to tally up exactly how much you’re making every month. Take a look through your recent pay stubs to find out. You may find your income varies each month slightly, even with one job. How many hours you work may change on a weekly basis, especially if you’re getting overtime. A good rule of thumb is to average your monthly income and take five percent off the top to account for any miscalculations.
You could be pulling in more cash every month than you realize. Do you share a household income? Any other money coming in is an income stream: child support, side gigs, Uber, selling crafts, mowing lawns… even babysitting for the neighbor now and again. Look for any potential source of revenue and take a snapshot of your monthly potential.
Add Up Your Expenses
Now that you’ve established what you’re bringing in, It’s time to figure out where your money is going. These lists will be lengthy and intimidating at first, but it’s crucial to lay it all out on the table. Your first will be fixed expenses, and your second is variable expenses.
Here are a few items on your fixed list:
- Car Payments
- Child Care
The above payments typically don’t change over time. Because you can count on them remaining consistent, you won’t have much wiggle room. Your variable list, on the other hand, is flexible; turn to this list first when cutting corners.
- Tag Renewals
- Birthday and Holiday Gifts
- Subscription Services
Pay Off Debts
Are you up to your ears in credit card debt and student loans? They can help you in a pinch, but relying on them creates a vast amount of financial pressure. It’s in your best interest to pay them off as soon as possible before they prevent you from achieving your goals.
You don’t need to pay off your debts in full to make significant progress. Take whatever money you’ve trimmed off your monthly expenses and allocate it towards removing small chunks of your debt at a time. It will add up, but only if you start paying them off now.
Invest Into Your Savings
Paying off your loans and debts is a priority, but you’ll still need some funds in savings in case of emergencies. You never know what life will throw at you; having a rainy day fund can prevent you from requiring another loan. Set aside at least $30 a month towards your backup fund to get it started. You can put more towards your savings once you take a decent chunk out of your current loans.
It’s never too late to tackle your debts and overcome them. Give your financial situation a good once over and trim the fat. You’ll be on your way to economic freedom in no time!
~Here’s to Your Success!