Making your money work for you is a game changer. If you’ve been letting your money control your life like I used to do, then I have news for you. Little changes make a big difference. It’s the secret that nobody’s telling you. Here are the four steps that I took to get my poor money choices under control. It’s so simple you’ll wish you had started sooner.
- Step 1: Create a budget. Developing and following a budget is the one of the easiest ways to take control of poor spending habits. You can make the process easy by tracking where your money is going. The best way to do this is by writing down your income and tracking your expenses for 30 days.
- Step 2: Build an emergency fund. If you had a $1,000 emergency would you be able to cover it without using a credit card or even worse, getting a loan? If the answer is no, you should find ways to save $1,000 as soon as possible. Saving that amount of money may sound daunting if you’ve never saved, but the truth is most people can save this within 30 days. If you want to learn how I saved $1,000 in less than 3 months you can read about it here in my post on living an abundant life on a budget.
- Step 3: Use Cash. This last step may seem like a hassle and counter intuitive when paying for purchases using your smartphone is the norm. However, this principle is the best tactic to curb overspending. When you use cash you simply can’t spend what you don’t have. Implementing this is the secret sauce to maintaining your budget. You’ll know how much to withdraw from your bank because you will have your last 30 days worth of expenses in your tracker. If you find that your income is less than your expenses, you have to make the decision to live within your means but cutting out the fluff. I had a difficult time with this. It took me several months to do this right. I plan on writing more about this hurdle, so be sure to check back soon to read about my progress.
- Step 4: Buddy Up. The saying “two is better than one” applies here in a big way. As an only child I found it extremely difficult to talk to people about my money struggles. It was hard because I have a good paying job and by all accounts I have my stuff together. The truth is I wasn’t being a good steward with my income and not only was I afraid to talk about it, I was ashamed at my wreck less behavior. It wasn’t until a coworker asked me about my personal finances that I looked myself in the mirror. He shared his story about conquering his overspending and how living debt free has changed his family’s future. He openness was just what I needed to face the truth about my debt. We meet weekly to discuss my goals and progress. I cannot elaborate enough about how much these conversations have spurred me into action. Writing about this is my way to tell the world that you can do it too.
Have you created your budget for the New Year? What steps did you take to develop your budget? If not, what the hardest part of creating and maintaining a budget for you? Tell us below. I’d love to write more about overcoming this hurdle.