3 Steps To Get Your Personal Finances In Order

I remember all too well struggling with my personal finances. I lived paycheck to paycheck. In fact, I was constantly trying to figure out how I was going to make it from one month to the next. Even when I tried to save a few dollars, something always came up. It was like a never-ending cycle of struggle that became the norm.

Finally, I realized I had to change the negative perception I had about budgeting and saving.  I’ve heard it many times before – live below your means. It took for me to visit a food pantry once before it finally sank in. I was determined to give it a really good effort. I finally sat down to create a budget that I was comfortable with. It has since helped me to budget, save, and live with a peace of mind.

Here are 3 steps to help get your personal finances in order to get ahead:

1. Needs vs wants. List all of your expenses. Then determine which of those are needs and which are wants. Once you know what your wants are,  get rid of them. Remind yourself that they are holding you back. Next, look for ways to lower the cost of your needs. For example: switch to a cheaper cell phone carrier that offers the same services or similar services that you have today. For more ideas, read “10 Ways To Add Money Back To Your Wallet”.

2. Decide how you’re going to tackle your debt. Once you know how much additional money you’ll have, determine how much more you can pay toward high interest debt. Figure out if you prefer the Snowball or Avalanche Method. I recently found this site, Undebt It. It is amazing for showing you the different debt payoff options and how soon you can have everything paid off.

3. Create a budget. Include everything from monthly fixed expenses, to groceries, to gasoline in your car.  Be realistic. Don’t put every dime toward expenses and debt. Set aside a little for you or your family to dine out or have a family night at home. When unsure of how much to save or if you can even stick to it, start out small. I started  with $15.00 per paycheck. As your balance grows, you will want to contribute more. If you need help creating a budget, see “3 Personal Budget Methods” to help you decide which method will work best for you. 

Even when it looks as if there is no hope, the best thing you can do is get started. As you work through each of these steps, remind yourself of how much easier life would be if only you were able to get your finances under control.