Being able to manage your finances is key to living a worry-free and fulfilling life. However, many Americans don’t know how to control their finances. Indeed, CNBC notes that 40% of Americans don’t even have $400 set aside for emergencies, and at least 25% have no retirement savings. These statistics are increasingly worrying as financial crises and unforeseen disasters can easily cripple a huge part of the population.
For this reason, it’s important to do what you can to better manage your finances. In this post, we’ve listed five tips that can help you achieve financial stability in the future and maintain your desired standard of living.
Create a Budget and Stick to It
The first step to understanding your finances is creating a budget. By doing so, it allows you to take a hard look at your financial or personal goals, and figure out your spending limit. When creating a budget, start by taking note of your income as well as your expenses. Then, subtract your expenses from your income to determine how much you can freely spend on non-essential purchases. Additionally, don’t forget to allocate money towards your savings and emergency funds in your monthly budget.
Use Expense Tracking Apps
Expense tracking apps allow you to track your spending habits and give you insightful reports of your finances. Through these apps, you can have an overview of where you spend your money and figure out where you need to cut back on spending. However, it can be challenging to choose which expense tracking app to download on your phone since there’s so many to choose from. If you’re interested in learning more about credit and keeping track of your credit score, the Petal Card app is ideal. Aside from helping you track your expenses, Petal Card will keep you updated on your credit score, help you understand how much interest you have to pay on your debts, and manage your subscriptions. Another great expense tracking app is Mint, which offers money management advice on top of the usual expense tracking features.
Look into Long-Term Investing
Investing as early as now can be a profitable activity. Investing in various financial instruments such as stocks, bonds, mutual funds, and real estate can help you earn passive income. However, a lot of folks find investing to be a daunting activity as it requires a lot of research and experience before making a profit. In this regard, a Data Driven Investor article on Medium advises you to buy a personal finance book to give you guidance on how to structure your portfolio. I Will teach You to be Rich and The Intelligent Investor are two great books that can teach you the basics of investing and personal finance.
Aim to Quickly Pay Off Your Debts
You should always prioritize paying off any debts that you might have. Through budgeting and saving, you can have an easier time simultaneously paying off your debts while not compromising your standard of living. Always aim to finish paying your highest-interest loans first as these can put a dent in your wallet if left unchecked.
For more tips on how to find financial success in the future, be sure to check our post ‘5 Tips from Entrepreneur and Businessman Robert Deignan’.