It’s never too late to manage your money and fix your personal finances. If you do it right you can save yourself a lot of stress in the future. The best part is that it’s never too early or too late to start. The only way you will start is if you are truly tired of that paycheck-to-paycheck lifestyle. Stop asking yourself “Why don’t I have money?” or “When are these Ramen Noodle days going to be over?” If you are reading this then consider yourself lucky and follow my lead.
So how do you manage your money?
Well, lucky for you we have software and apps to help you manage your money. Quicken, Moneydance, and Acemoney are only a few of the many pieces of software. For those of us that cannot live without our smartphones there are plenty of free applications out there like EasyMoney, Expense Manager, and T2Expense. These apps are already set where you just have to plug-in your numbers and it will show you where your money is mostly going. If you are anything like me then get out a pencil, paper, and calculator. Sometimes doing this on your own and on paper for you to see is enough for you to come to a realization and start making a change. After all, this was the only way people knew how to manage their finances before technology came around.
Step 1: Calculate what you earn a month. If you make the same amount every month then this part is simple. If you work based off tip or commission, calculate what you average a month but DO NOT overestimate your earnings. We all know that if you work at that popular restaurant, then a good Friday night can bring you in over $200. Meanwhile, a measly Tuesday night may not be as rewarding.
Step 2: Make a list of all your credit cards and monthly expenses. Think long and hard about this, and don’t forget that $10 Netflix bill or gym membership (the small fees we all tend to forget about). I would always forget to add my cell phone bill. If there is something that you are currently not paying off I want you to add that in too.
Step 3: Subtract Step 2 from Step 1 (Step 1 – Step 2, for my pencil-and-paper people). Hopefully you are still in the positives. If you are, then you are probably saying to yourself “I could be rich by now!” If you happen to be in the negatives you should sit down and prioritize your payments as far as which debts to consider first. Also, maybe a second job can be temporary but it will definitely fix your financial situation.
“Well I need to eat.” “I need to pay to get to work.” Listen up guys; you need to start cooking and taking food to work. You will be saving so much money and you may get in touch with your inner chef. As for the transportation, ask yourself how much you actually spend on going to work and how much is spent on going other places. These are what I like to call flexible expenses. If you go grocery shopping, do you really need those Twinkies? I bet if you go shopping on a full stomach you won’t crave those types of desirables. Try it! Anyway, you get the picture.
Who are you and why should I follow your lead?
I’ve been there! I never wanted to listen to someone tell me how to manage my money, especially from someone who has plenty of it. I am not rich but I am happy with my financial situation. In less than a year I have improved my credit score tremendously. I pay all my bills (on time) and enjoy the occasional night out. I got ahead of my debt. Most importantly, I never stress about money!