3 Simple Ways to Take Control of Your Finances

Research has proven that a leading cause of stress and anxiety for the average American are issues related to finances. Some causes of these common financial problems are the accumulation of debt, the disdain for discussion of topics centered on money, and the result is lack of knowledge on personal finance.  Evidence of this problem is that an average American owes about $10,000 in credit card debt; you can read more on that here.  If you have too much debt, you may have to take a bankruptcy means test and eventually file bankruptcy. Many people question whether in a bankruptcy keeping house is an option.

The 4th most popular New Year resolution for 2019 is “Saving More and Spending Less;” this shows that some have come to terms with the problem and are constantly seeking a way out of their financial mess. However, having the sense of responsibility that you’re in control of your financial position does not put you out of the problem except you have access to the right information. If you’re one of those asking the question, “How do I improve with my finances?” then you’ve come to the right place. 

Here are three simple ways to plan your finances: 

  1. Simplify and Prioritize Your Financial Life: 

You already know what you need to do to meet up with your financial goals, pay up your debt, save enough to retire well, pay off a mortgage, and invest. Unfortunately, we don’t have the funds to do all at once, and it can be difficult to decide which goal to meet first. Should you pay off your mortgage before investing, or should you invest before saving up for retirement? 

To decide which should come first, simply ask yourself why a particular goal should come first, and how it will affect other goals. For example, if you’re interested in investing in the stock market, this goal might eliminate the need to save for retirement, and as such, you may decide to commit more dollars into it. 

  1. Create an extremely simple budget: 

It can be difficult to put a budget together, especially since you may have to do away with some seemingly important things. 

Most times, when we think of a budget, we have the perception that a budget is a difficult activity that requires some accounting skills, but this is not the reality. A life-changing budget should be as simple as possible, with goals that are easy to achieve. Your monthly budget should not take more than 15 mins to prepare, if you spend more than that, then I assure you that you already include goals that are unnecessary. 

Don’t go for a hyper-complex budgeting tools/apps/methods when preparing a budget; they’ll leave you more confused than you started. 

  1. Track All of Your Debt 

If you have any debt, then you need to know what they are, why you have them, and ask yourself if they were really necessary in the first place. If you know the reason why you accumulated that much debt, you can then start taking steps to prevent a re-occurrence. 

To track your debt, you can make use of some free tools, such as Credit Sesame and Credit Karma to track your credit score and see how far you are from meeting your financial goals. 

Once you understand why you’re in debt, you should use the free Vertex42 debt reduction spreadsheet to put together a debt reduction plan. 

To get a permanent result, you need to have the right mindset. You need to be; 

  1. Gracious to yourself: Realize that taking two steps forward and a step backward is still a step forward. Don’t be too hard on yourself when you veer off-budget. It is normal to go off plan when you’re just starting, but you will conform to the system you’ve created for yourself eventually.
  2. Don’t give up: Persistence is the key to getting a radical result in your financial life. There are no shortcuts to persistence. 

Author bio:

Dave is a writer and executive at personal finance company that helps people get and stay out of debt. He writes such articles as Chapter 13 Bankruptcy FloridaHow Chapter 13 Affects Your Credit, and Getting a Loan After Bankruptcy. He is also the writer of the Snow Day Predictor comparison article.

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