Empty wallets? Now that the United States budget crisis and raising the debt ceiling is done, we face another volatile stock market. Our collective empty wallets are refilled or are they? Who empties your wallet? Do you keep track of where your money goes? What do you do when you run out of money?
How you handle your cash, credit cards and the rest of your finances determines your financial well being? Do you know how much money you have in your wallet? Do you know how much you are spending? Are you spending less than you earn? Do you have savings? How do you keep track of what you are spending? If your answers are I don’t know, you probably out of control! Here are 5 simple things to take control of your wallet.
Start a budget – I know you don’t know how to do it, it is too hard, you don’t like being controlled or really don’t want to know how bad your finances are! Stop making excuses. Keep it simple, start with your monthly income. If you are paid weekly, multiply it by 52 and divide by 12. List all you expenses such as mortgage or rent, utilities, property taxes, insurance, food, entertainment etc. If you missed anything, you can catch it when your pay bills.
Once you have your budget set up, you can record your expenses during the month. If you are spending more than earn, you will need to lower your expenses. A budget helps you track your expenses and helps you control your spending. Setting limits help you know how much you can spend. The budget shows you on paper if you are overspending or reaching your goal. Budgets are a road map to your financial goals.
Increase your income – How can you increase your income? Merit increases, promotions, new job, part time job, side hustle or selling something on eBay. Additionally ideas earning interest, capital gains, or dividends. Start a service business such as consulting, catering, lawn service, yard sales, tutoring, or child care. Be creative there are many things you can do to earn extra money.
Problem-Solving Skills – We are not talking math skills here! You make decisions every day that can affect your wallet. You know what I am talking about, it is your morning coffee at Starbucks, going out for lunch, and adding to your debt. When you need to find savings in your budget, you make choices. Cutting expenses is not just reducing what you spend, it is spending smarter! The kinds of choices you make help you achieve your goals. How are your problem-solving skills?
Determination and Tenacity – When faced with goals of improving your financial well being, it takes a lot of skills. Sticking with your goals is important! This is tough, changing habits, making adjustments or beginning a new routine takes considerable effort. It is tenacity and determination that gets you there. Stubbornly sticking with bad habits does not work! Making small changes will help you increase what is in your wallet. Are you ready to change?
Acquisition of Financial Skills – Many people express that they are not comfortable with numbers! You have no choice, if you do not have the financial skills, you need to get them. It is as simple as spend less than you earn, save for the future and stay out of debt. There are books, magazines and personal financial blogs (like this one) add to your financial skills. Financial literacy influences your decisions, actions and results. Improving your financial skills help all of us. Understanding credit cards, mortgages, banking, and money is important because you are using these services every day.
Final Thoughts – Taking control of your wallet is one of the most important tasks you have! What are you waiting for? Start small by reigning in your spending and make small changes. A budget is a great way of finding out exactly where you spend your money. Looking at all your options includes finding additional income. It helps to pay down debt or add to savings. Making changes requires are difficult, it takes a lot of effort to make changes. It takes determination and tenacity. Learning the financial skills helps you make better decisions and choices. What are you going to do? Empty wallets can change!
Photo by: danielbroche