4 Basic Ways to Feel on Top of Your Finances

Budget

Budgeting is the best way to organise your money- it shows you what’s coming in and what’s going out. It sets limits on what you’re spending for each category every month should be. 

Budgets let you be more in control of your money as you know where every penny is going, at the end of the month you’re not left wondering where all your money went instead you have a record of what happened to each penny. It takes 10 minutes at the start of the month to write out a budget and at the end of the month to fill out the actual numbers.

Many people find budgets a hassle but they only become one when you over complicate it: it’s simple to just write out what you expect your income to be, what your fixed expenses are, what you want to spend on food and other activities part of your monthly routine. Keep it simple by writing it in a notebook or using excel- whatever is easiest. 

By giving each category a set amount of money you can put money towards other financial goals to protect you such as having an emergency fund that will give you financial security in the case of a loss of income or anything that can affect your income leaving you unable to cover your basic necessary responsibilities. Having a budget lets you organise your money so you can put money on a monthly basis into savings and towards debt if you have any.

It also lets you plan for future purchases for example if you want to go on a holiday, your budget lets you see how much you can put away each month and save for a trip instead of having to put it on a credit card and then paying interest once you come back.

Track Your Spending

This is similar to the step above, but throughout the month keep an eye on your spending to see where your money is going and ask yourself if what you’re purchasing is necessary and if it really means much to you in the long run. 

At the end of each month review your spending and ask yourself if what you’re spending your hard earned cash on is worth it. What things make you happy to spend your money and what things you just do out of habit and impulse that later you forget what you even purchased- cut those things out. Make your spending more mindful because when you look at your monthly statement instead of feeling confused as to what exactly you bought you’ll know what spending amounted to that much and that you were content with that spending rather than upset at yourself or feeling guilty.

Have Few Bank Accounts and Know How Much is in Them

I had so many bank accounts and it would make me feel overwhelmed- throughout the month I’d just move money around between the accounts and half the time I didn’t even know what the account was for. So, spend a bit of time organising your accounts- which accounts do you need, your budget can help you decide which accounts you want to use for what purpose. Close the accounts you have no use for and write out how much money is in each account at the end of the month.

Writing out how much money is in each account helped me to feel secure that I knew where my money was kept and why it was in a certain account. I no longer have these random accounts with random amounts of money kept it, I have few accounts that keep my money organised and I track how much money is in them at the end of the month- if I ever am confused regarding the amount I can consult my budget and bank statements.

Having your bank accounts organised can reduce stress since you know how much money you have totalled in the accounts and how your money is organised.

Set Financial Goals

I know you’ve heard it countless times that setting goals is an important thing to do, but setting financial goals help you sort your finances out into what is a priority to you. Is building an emergency fund of 3-6 months expenses something that is a priority for you, if it is then set it as a financial goal and create plan by consulting your budget to see how you can go about completing your goal.

Other financial goals can be to set up saving funds for one off yearly expenses such as car insurance, christmas, vacation- setting up these saving funds mean you have a goal of how much money you want to spend in each category and how many months you have to save for it.

Paying off debt can be a goal- write out your debt and their amounts, write out a plan of attack and consult your budget. Setting financial goals is completely personal, it’s what matters most to you, what you want for your life and what financial priorities you have. Making goals can seem daunting especially if you’re goals are big, but break them down and make small steps each month towards what you want to achieve.