Being in control of your finances is easier said than done but it’s an important thing to do as you are thinking about your future self. As we start off a new month here are some tips on how to put your finances in order.
It is commonly said that it all in the mind and money is no exception. The first thing we have to do is evaluate our relationship with money. When what we do revolves around money, we will often be drawn away from what we are passionate about. Our minds will often live in fear of either success or failure. We should also find a balance between holding on too much to money in the name of saving and letting go to create room for more. At the end of the day money is the means, not the end.
- Set your financial goals
It’s hard to stay on track when you don’t know what you are working towards and that’s why it’s important to set financial goals. Your financial goals should be split into short, medium and long term goals. An example of each could be saving up for a vacation, buying a car and putting aside money for investments respectively. Make sure that you set SMART goals.
- Create a budget
A budget means being aware and tracking the money coming in and going out every month. It is important to keep track of your income and expenses so as to get control over your money and get it to do what you want.
- Emergency fund
Set up an emergency with three to six months’ worth of your expenses. This acts as a safety net and gives you the freedom and flexibility to go after your dreams when you need to make changes in your life.
Make your money work for you. Other than your monthly expenses i.e. rent, groceries, transport, utilities, leisure etc. and the emergency fund the amount apportioned as savings should be invested.