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’re going to get started is if you’re really tired of that paycheck-to-paycheck lifestyle. Stop asking yourself “Why don’t I have money?” or “When will these ramen noodle days end?” If you’re reading this, 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 just a few of the many pieces of software. For those of us who can’t live without our smartphones, there are plenty of free apps like EasyMoney, Expense Manager, and T2Expense. These apps are already set up where you just have to enter your numbers and they will show you where most of your money is going. If you’re 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 notice and start making a change. After all, this was the only way people knew how to manage their finances before technology came along.
Step 1: Calculate what you earn per month. If you earn the same amount every month, this part is simple. If you work on a tip or commission basis, calculate your monthly average, but DO NOT overestimate your earnings. We all know that if you work at that popular restaurant, a good Friday night can bring you over $200. Meanwhile, a miserable Tuesday night may not be as rewarding.
Step 2: Make a list of all your credit cards and monthly expenses. Give this some serious thought, and don’t forget the $10 Netflix bill or gym membership (the little fees we all tend to forget). I always forgot to add my cell phone bill. If there’s something you’re not currently paying for, I want you to add that as well.
Step 3: Subtract Step 2 from Step 1 (Step 1 – Step 2, for my pen and paper people). I hope you are still in the positive. If so, you’re probably saying to yourself “I could be rich already!”. If you find yourself in the negatives, you need to sit down and prioritize your payments as to which debts to consider first. Also, maybe a second job may be temporary, but it will definitely fix your financial situation.
“Well, I need to eat.” “I need to pay to go to work.” Listen guys; you need to start cooking and bring food to work. You will save a lot of money and you can get in touch with your inner chef. When it comes to transportation, ask yourself how much you really spend to go to work and how much you spend to go to other places. These are what I like to call flexible expenses. If you go shopping, do you really need those Twinkies? I bet if you go shopping on a full stomach you won’t want those kinds of desirable things. Try it! Anyway, you get the idea.
Who are you and why should I follow your example?
I’ve been there! I never wanted to hear someone tell me how to manage my money, especially someone who has a lot. I am not rich but I am happy with my financial situation. In less than a year I have vastly improved my credit score. I pay all my bills (on time) and enjoy occasional nights out. I got ahead of my debt. The most important thing is that I never stress about money!
