6 Ways To Have More Control Of Your Finances
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“If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed.”-Edmund Burke
Don’t you think that life would be much easier if we had good financial skills? The term “financial skills” sounds daunting, doesn’t it? Don’t worry, you don’t have to be a math whiz for this, all you need to know is basic addition and subtraction. However, to be a pro at handling your finances you have to move beyond viewing money as a means to meet your ends. As much as we dislike to admit it, money does rule the world and we need to control our money before it takes control over us.
We work for money, don’t we? Therefore, we need to learn to manage it and this is something many fail at. The ones who actually figured out the way to manage their money have gone on to become millionaires in life. If you’re someone who is struggling with financial management, here are a handful of tips which will help you get a grip on your finances.
1. Draw A Budget
For this, you need to keep a track of your monthly expenditures. You know you are earning a fixed sum every month, right? Out of that, you need to demarcate the extent of your expenditure and denote it as the “budget for the month”. The best way to do this by taking stock of your fixed expenditures (for example your EMIs, rent, etc.) and the variable spendings (groceries, electricity bills, etc.). Add it all up to get an idea of your average monthly expenditure.
This will make you careful in terms of spending money as you would be aware of your budget and wouldn’t spend beyond that except in case of emergencies.
2. Save Money By Cooking At Home
We know that ordering food saves time and energy. But it also burns a hole in your pocket (no kidding). Learn to cook, that way the only money you’ll spend would be on groceries. And trust us, even if you eat out thrice in a week, the money you end up spending on that would be more than the double of what you would spend on your weekly groceries. Try to eat out only on special occasions and celebrations. Don’t make a habit out of it.
3. Get Rid Of Your Debts
Debts are really easy to incur but it’s pretty difficult to pay them off. If you know you have pending debts that you want to clear in order to be peaceful in life, what are you waiting for? Instead of spending money on an expensive vacation, clear your debts. Life itself will seem like a vacation after your debts are cleared. The more you pile up the debts, the more stressed out you will feel (1). And chances are that you might take out that frustration on your family and close friends. Building up debts is essentially like creating unnecessary tension in your life.
4. Start Funding Your Retirement
Most of us don’t think of planning for our retirement until we hear it knocking at our doors. This is the worst thing you could do when it comes to financial management. Now is the time to plan for everything in your life, most importantly your retirement. Open a retirement account for you right away, for the compound interest always favors the young.
5. Automate Your Finances
Automating your finances is the wisest step you can take to ensure that your money is being used for the right things. Set aside a particular amount of money that will be automatically deducted from your account. Automate some of your bills as well. We are humans and somehow we always manage to miss out on one thing or the other. Chances are that you might have forgotten to keep money aside for your electricity bill that comes only in the second half of the month when you’ve already spent half your salary. In such cases, automating such monthly bills is a very good idea.
6. Educate Yourself About Finances
Personal finance is one topic that we all need to educate ourselves on. Learning about finance helps us understand as to how we can manage our money well. It also teaches us about the best investment options where we can save for the future or rather just grow our investments (2). There are online courses or resources that you can learn from, or you could go talk to a professional financial advisor as well. Some of the schools have classes about financial management. But don’t worry, you don’t have to go to school to learn the basics. In the present world where knowledge is free, all you have to do is embrace the cyberspace and find your stairway to the financial heaven.
Managing finances is definitely not easy. There will be many times when you would be left without a single penny in your savings. Just don’t give up! Find your weak spots, where you go overboard with your spending and work your way to curb them. And slowly, but steadily you will build the perfect foundation for your financial success.
