How to Manage Your Personal Finances

Managing money isn’t a favorite topic. However, learning to control your finances is important. The key is to control your money rather than letting your money control you. Here are a few tips to help you manage your finances.

First, you have to have a budget. A budget is absolutely key in controlling your finances. If you’re on a pretty stable income, this is easy. Write out the amount of money you make each month. Then, start subtracting the things you have to spend – mortgage, electricity, car payment, etc. Next, include things like groceries, clothing, sports equipment for the kids, and any other expenses you can think of.

By the time your budget is written, you shouldn’t have any income left to spend, even if you have to put a set amount of income into savings.

To really control your finances, you also need an emergency fund. This will keep you from blowing your budget or turning to credit cards when the car breaks down or the washing machine needs repair. You should have at least $500 in savings that you only touch for emergencies.

Once you have a budget, make sure you actually use it. Write down what you spend, and don’t spend more than you’ve budgeted. You might have to adjust your budget to line up with your finances as they actually are. It takes some time and can be frustrating. Once you have the hang of a budget, though, you’ll be able to control your finances like a pro.