Five simple steps to initiate improving your finances

Do you have debts but do not know the best way to pay? You know it is good to save but not sure where to start? Do not worry here I will share what you need to know to take control of your finances.

1. Believe in yourself.   The most important thing to improve your finances is to believe in yourself. I firmly believe that you have everything you need within yourself to realize your financial goals. For more complicated or difficult as your economic situation, don’t lose hope and believe in yourself.

2. Check what you earn and spend.  It is important to have a general idea of what you earn and spend each month. If you are unsure what you want, I recommend you collect the stubs for the last three months to get a general idea of your income. You should know how much you earned in the last three months as it can vary and three months can give you a good approximation of your monthly salary. Then figure out what you want, I recommend point your monthly expenses for the last three months. It need not be very detailed, but it should include anything you pay each month (e.g. Rent, food, insurance, transportation, etc.). As your income, your expenses may also vary so it may be easier to check what you spend entering your e-banking or reviewing your statement. If you do not have access to any of these options, make a handy list. From there you can compare what you spend and earn. If you earn more than you spend, congratulations! With the money left over, you can use it for your financial goals. If not, try to be realistic with what you can afford. Perhaps there are ways to save money on a little later this month.

3. Choose your priorities.  When it comes to money, many people want to do everything at once. For example pay their monthly bills, save for retirement, pay off their debts and save for their children’s education. For most righteous as these goals, it is difficult to achieve everything at once. I recommend you choose which goals are your top priority. If you do not know how to choose, start with what would make you feel calmer.

4. Saving for emergencies.  I recommend you to include among your priorities ‘saving’ (even if it is just a little) for unexpected emergencies. It is best to have an “emergency fund” to pay your monthly costs between six to eight months. These funds should be used only in an emergency. Having saved a little bit can help you in a hard time like if your car breaks down or you become ill and needs medical expenses or pay down the hours you work. Even it takes some time but money saving is important to get rid of worries in crises when any expense is not expecting to arrive.

5. Celebrate!   It’s a big step to start learning about your finances; the celebration is something that not everyone wants to do. Personal finance does not have to be boring or complicated, so as to reach a breakthrough make a certain goal to celebrate. This celebration does not have to be expensive or even not have to be something that costs much. You could go to the park with your kids or prepare a dessert at home with friends. The important thing is to do something that makes you happy and so does not lose the motivation to keep going.