Are you struggling to get your expenditures under control? Personal finance doesn’t come easy to everyone. You try to manage your expenses, but something or the other happens, and you end up overspending. Managing your money requires planning, consistency, and discipline. It may seem hard in the beginning, but you will thank yourself for it in the long run. In this article, we will share some of the best personal finance tips that can help you boost your savings and plan your investments to secure your financial future.

Let’s begin.

1.    Setting a Budget

Financial planning begins with setting a budget. According to a 2019 survey, 33% of Americans do not have a budget, and therefore, have no idea how much they are spending. A budget can help you control your expenses and keep track of your savings. It also helps you plan for any unexpected expenses, such as your TV or laptop breaking down, medical bills, and more.

Here’s a quick six-step guide to setting a budget:

Step 1: Gather all your financial statements. This includes your bank statements, utility bills, credit card bills, mortgage statements, receipts from the last 3 months, paystubs, investment accounts, etc.

Step 2: Calculate your income with the help of the financial statements gathered.

Step 3: Prepare a list of your monthly expenses using the receipts and bills you have.

Step 4: Separate your fixed and variable expenses. Fixed expenses include things like rent payments, auto loan payments, mortgage payments, utilities, etc. Variable expenses change every month. Some examples are groceries, entertainment, dining out, gifts, and gasoline.

Step 5: Compare your monthly income against your expenses. If you are earning more than what you are spending, you are off to a good start.

Step 6: If your expenses exceed your income, you need to make some adjustments. Review your expenses again and look for things you can cut back on. For instance, if you have subscribed to a streaming service you don’t use, you can cancel your subscription.

If you have a savings goal in mind, you can keep adjusting your budget (within reason) until you meet it.

Pro-tip: We recommend allocating 20% of your monthly income toward financial priorities, such as an emergency fund, debt payments, and adding to your retirement fund.

We highly recommend Truebill which is our go to budgeting platform!

2.    Consider Cash Over Credit

If you are trying to get your expenses under control, this is one of the most helpful personal finance tips to keep in mind. Confused? Let us elaborate.

It is easy to lose track of your expenditures when you buy a lot of things on credit. In the long run, this can do a lot of damage to your finances. You could go over budget. It could also affect your credit score, and you might even end up paying more in interest.

An all-cash diet can help you avoid such problems. It helps you tamp down on any discretionary purchases and prevents you from overspending.

Pro-tip: We recommend spending 30% of your monthly income on luxuries, such as dining out, entertainment, shopping, etc. This will help you establish a balance between your savings and expenses and give you the freedom to spoil yourself a little without going over budget.

3.    Set Up a Financial Calendar

A financial calendar helps you manage things like paying taxes and reviewing your credit reports. It is easy to forget about these things amid daily tasks. It also helps you control your yearly expenditures and works in tandem with your monthly budget. You can use it to:

• Establish your yearly financial goals.
• Mark important dates for filing taxes, drawing up your 3 free credit reports, renewing your insurance, etc.
• Schedule six-monthly and year-end financial reviews to see how you are doing with your savings, expenses, investments, and taxes.

4.    Review Your Loans and Interest Rates

If you are looking for personal finance tips on managing your loans, this should help you out. Suppose you have taken out multiple loans, and you need to plan how to pay them off in a way that lowers your cost of borrowing. Interest rates are a primary way to determine which loan to pay off first.

For example, most credit cards come with a compounded interest rate. The longer you put off these payments, the higher they get. So, if you have to decide which loan to pay off, opt for the one with the highest interest rate.

Additionally, you should avoid taking on any extra debt if you are still paying off your current ones. You can also opt to refinance your loans. Loan refinancing refers to combining all your existing debt into one large loan. A single loan is easier to repay. You can also enjoy better payment terms and a lower interest rate. We suggest consulting with your bank for more information on this.

If your looking for a great loan service we recommend Main Street Finance Group.

Main Street Finance Group

5.    Ask for Professional Advice

When it comes to personal finance, it always helps to ask for an expert’s opinion. Consider speaking to a financial planner about your current financial situation. Besides offering additional personal finance tips, a financial planner can also help you make smart investment decisions.

They will be able to guide you on the risks associated with different investments and help you select investment products that reflect your risk appetite and deliver the returns you want. Investing is a long-term game, and having a financial planner onboard can help you make the most of it to grow your retirement savings.

A financial planner can also help you realize your financial goals more quickly and easily, assist you in preparing a budget, and more.

Let’s Sum It Up

As mentioned earlier, managing your money requires consistency and planning. It is essential for securing your financial future so that you can live the life you desire.

Remember, you don’t have to be too stingy about how you spend your money. It is okay to pamper yourself a bit. As long as you are meeting your savings goals and managing your debts responsibly, don’t be afraid to kick back and relax once in a while.

Did you find these personal finance tips useful? Follow Rykerblogs for more interesting articles on personal finance and investments and discover a wealth of advice on financial planning.

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