It’s no secret that for many of us, it’s a struggle to manage and balance our finances. I’m sure we’ve all had moments where we question our ability to take care of all of our expenses and still manage to have just a little leftover to possibly build up the savings. It can seem like month after month it’s a never ending cycle that keeps us from getting ahead and working towards some of the bigger financial goals we have for ourselves and for our families. Achieving financial freedom and getting out of the cycle that makes us feel like there’s no way out is possible. It’s going to take a little discipline, but there are still ways for us to take care of the expenses while building up the savings.
1. Write down all your expenses.
a. List all monthly fixed expenses
b. List expenses that occur a few times a year
c. Review & write down all “miscellaneous” spending from the previous month
d. Total up all your expenses and compare to your net this can be a huge eye opener to actually see where all your money is going. If you find that you are over spending, make cuts to the “miscellaneous” expenses and look for alternatives to some fixed expenses
2. Create a budget.
a. This allows you to be proactive with your money. Knowing where X amount of your income is allotted and having X amount of dollars that has the potential to grow your savings account or save you on a rainy day.
3. Look for ways to save.
a. There are some monthly expenses that have the ability to be flexible (electric, water & sewage, etc.), these can be managed with efficient use. For bills that have a set amount, feel free to shop around and see if you could get similar services for a better price.
4. Set up automatic savings.
a. This is a good way to make use of the “out of sight, out of mind” method, where if the money is tucked in savings before it hits your regular account, you can have some peace of mind that you won’t be tempted to keep it in your regular account versus transferring it out.
5. Continue to track your spending.
a. This is one of the most important steps. It allows you to see what things may need to be adjusted, keeps accountability for your spending habits, and has the potential to boost your mood if things are looking better and the weight on your shoulders are slowly being lifted.
We can all relate to having those feelings of worry, stress, anxiety, and emotions that just don’t serve us well. However, financial freedom is within our reach and I believe that taking the right action steps can bring us just a little closer to relief.
Source: Buffini & Company