The ultimate goal of cleaning up our personal finances is to spend less than you earn. It’s easy to say, isn’t it? I can already hear you say to me: truly, yet me… ” and, I don’t have any acquaintance with you, yet you are doubtlessly right!
The good news is, you aren’t being asked to be perfect when it comes to your personal finances. Perfection does not exist in this area anyway. But can we improve things one step at a time?
Why not develop a habit of taking care of your money ? After all, it’s our money that allows us to do and have everything we have.
And how do we clean up our personal finances in 3 easy steps?
Take a picture of your personal finances
Write down your income, expenses, and debts. This is the starting point. If we want to clean up our personal finances, it is because we want to improve our situation. So you need to know where you are beginning. It’s like drawing a travel itinerary, impossible to trace a route if you don’t know where you are starting from. This is our financial itinerary!
Evaluate your expenses
Is there anything superfluous that you could reduce or eliminate? This exercise asks us to differentiate between a need and a desire. Ask yourself: Do I really need it or want to need it? You know, money and emotion go hand in hand. Don’t let your emotions make decisions, emotions can compromise our judgment. How to do? Wait 48 hours before making an expense if you are not sure you can distinguish between need and want.
Be careful, don’t change all your habits at the same time. You are going to be miserable and that is not the point of the exercise. Take it gradually. Set simple goals for yourself. What are you comfortable with to begin with? Resisting temptation is learning.
ave 10% with each pay
And this even if you are in debt. You know when we need money we make bad decisions so pay yourself first. It’s the small gesture that will help you feel less enslaved to your debt and take control of your finances. For example, you had a payroll of $ 700, you need to set aside $ 70. This is what will make the difference when you have the unexpected. This will prevent you from getting into more debt and you will have money for occasional expenses. Occasional expenses, we all have them, whether it is clothing, car repairs or gifts, these are expenses that you will certainly have during the year and they never come at the right time. If you put money aside with every payday, you will eliminate the financial stress that these expenses cause.
Saving is like filling a sink. The speed at which you fill the sink can vary, the important thing is to fill it. Once a year, take a photo again and see the evolution! You might profit by re-evaluating your numbers.
To be successful in cleaning up your personal finances, you need to make small changes . It’s a big step towards eliminating financial stress.
A great way to be successful is to set an achievable goal. Your goal should be clear. “I want to save within three months”, it is not clear. You won’t get there that way. How much do you want to save? How much debt do you want to pay off faster? When? The greater intention does not have the power of the smallest action.
And this is not a competition!You don’t need to demonstrate anything to anybody, just to yourself! Remember, you have to walk before you run!