5 Ways to Get In Control of Your Finances

Our guest blogger today is Veronia Bailey. She is on a mission to leave no family behind with A World Changer. She’s a World Changers financial professional motivated to teach others about what she has learned about the finance world. Here’s her blog post on getting control of your finances. 

It’s not easy to be thrifty. However, some people make it work by cutting unnecessary expenses, couponing, searching for the best deal whether in-store or using apps, and upcycling. For others, the thought of living with less even temporarily seems scary. But budgeting doesn’t have to be faced like a wilderness survival reality TV competition. While there might be some sacrifice and compromise involved when you first implement your budget, like opting for a homebrew and not a $6 latte at a popular coffee spot. 

However, there’s a happy middle to most things and a way that won’t make you hate sticking to your financial goals.

In order for you to get in control of your finances, you need to have a budget. And simplifying the budgeting process can help ease the transition. Check out the following suggestions to get control of your finances by budgeting. 

1. Record Your Purchases

Do you feel like you have no idea where your money is going? You’re not alone. 

That’s why a great way to take control of your finances is to evaluate your spending. For a week or a month, write down everything you purchase and the cost. Keeping your receipts will definitely make this process easier. If you’re not a pen-and-paper gal, you can use your smartphone (more on that in point 3). 

By doing this, you’ll notice patterns and identify ways you can cut them down. For example, you may notice that your latte habit is costing you over a hundred dollars per month. 

You don’t have to eliminate it completely, however, you can cut down on how often you purchase it. 

2. Pay Attention to Your Subscriptions 

Subscriptions automatically come out of your account or credit card every month and you may not give a second thought to it. 

As a matter of fact, the average person thinks they spend way less than they do on subscriptions. 

According to CNBC, “Consumers’ offhand guess of how much they spend monthly on subscriptions averaged $86, according to a survey commissioned by market research firm C+R Research. Yet when asked about subscriptions in specific categories, the actual amount was $219 on average.”

Therefore, make a list of subscriptions that you have and their cost to see what you’re really spending on them per month. 

You may notice that you don’t use some subscriptions anymore or forgot to cancel the free trial on others. Those are the easiest to get rid of. For the others, you can choose to pause them for a period of time to save money and protect your finances.

3. Use Your Smartphone

Your parents may have used a system of labeled envelopes to budget for various upcoming expenses. With society not being quite as cash dependent as it used to be, you may want to use something more digital to budget. 

Your best budgeting tool is probably in your pocket, your purse, or wherever your smartphone is at the moment.

Budgeting apps can connect to your bank account and keep track of incoming and outgoing cash flow, making it simple to categorize current expenses and create a solid budget. 

A quick analysis of the data and charts from the app can give you important clues about your spending behavior. This brings us back to our first point about tracking your spending. 

 Through certain apps, you may discover that you spent $100 last week on on-demand movies. $5 here and $10 there can add up quickly. 

Apps can show you how your money could be evaporating in ways you might not feel on a day-to-day basis.

Some apps give you the ability to set a budget for certain categories of spending (like on-demand movies), and you can keep track of how you’re doing in relation to your defined budget.

Some apps even provide alerts to help keep you aware of your spending. And if you’re feeling nostalgic, there are even apps that mimic the envelope systems of old, but with a digital spin.

Wondering what apps to download? Nerd Wallet recommends:

• Mint

• YNAB

• Goodbudget (perfect if you love using envelopes) 

• EveryDollar

• Honeydue

4. Make an Emergency Fund 

Even with modern versions of budgeting, one of the biggest risks for losing your momentum is the same as it was in the days of the envelope system: unexpected expenses. 

Sometimes an unexpected event – like car trouble, an urgent home repair, or a medical emergency – can cost more than we expected. A lot more.

One simple inconvenience can ruin your finances.

A good strategy to help protect your pockets from unexpected expenses is creating an emergency fund. 

Don’t be discouraged if it is taking a while to build this fund, that’s normal. Don’t give up because it will be worth it if the tire blows out, the roof starts leaking, or you throw your back out trying to fix either of those things against your doctor’s orders. 

An emergency fund can also be great for your business when you’re going through slower periods. 

There is no “one size fits all” approach for an emergency fund. How much money you keep in it is unique to you and your situation. However, I recommend saving between $1,000 and 3 months of your income.

Three months of income may sound like a lot, but if you experience a sudden loss of income, you’d have at least three full months of breathing room to get back on track.

5. Make a Flexible Budget

Leave wiggle room in your budget.

As you work with your new budget, you may find that you miss the mark on occasion. Some months you’ll spend more and others you’ll spend less. That’s completely normal. 

As time goes on, you’ll have an average for each expense category or expense item that will reveal where you can do better – but also where you may have been more frugal than needed.

Next Steps 

There is no time like the present to get control of your finances. 

Make that new budget, then buy yourself some ice cream or turn on your air conditioning. Once you have a better idea of where you stand, budgeting might not seem like a punishment.

As a matter of fact, you might find that it’s a useful, much-needed strategy that you CAN stick to – all part of the greater journey to your financial independence.

About the Author 

Veronia Bailey is passionate about financial education. With an alarming lack of education about financial fundamentals, she wants to help make sure your family is not left behind. Veronia does this by teaching you important financial concepts to secure your financial future.

What inspired her to start this business was the opportunity to be able to educate everyone on what I have learned in the financial industry, and how to save, invest and secure my family’s financial future along with how to save your money tax-free, so I am able to plan for retirement.

She believes this information needs to be taught to all women and their families, Her agency offers over 150 products, and the companies she brokers for are Transamerica, Voya, Nationwide, and many more.

You can follow Veronia on LinkedIn and check out her website.