Are there times when you wonder where your last paycheck went? It doesn’t really matter how much you earn, how you spend it is more important. If your expenditure regularly exceeds your income, you’ll soon find yourself lying awake at night worrying about money. You’re also going to have a growing mountain of credit card debt and no savings.
This is not the rosiest of situations to find yourself in, but there are things you can do to get back on track. You shouldn’t feel embarrassed about your situation either, because there are plenty of other people in exactly the same boat. If you want to reduce the level of stress in your life and get your finances back under control, here are some steps you can take.
Figure Out What You’re Spending Your Money On
When was the last time you tracked what you were spending your money on? If you’ve never done it, then now’s the time to start. Get copies of your last three months bank and credit card statements and create a worksheet. List amounts you’ve taken through automatic withdrawal, cheque, debit or credit card payment. The figures will allow you to work out an average for your variable expenses such as gas, utilities, and food. Insurance premiums and taxes may also be included. If this sounds a little tiresome, there are apps that can do it all for you.
Look for Ways to Cut Back
You might be able to cut back on your fixed expenses by negotiating down the interest rates on your debt. Another option is refinancing with the help of bad credit loans. Shop around for better prices for your insurance, cable, internet, and phone service. Are there things such as gym membership you’re paying for but not actually using? Could you cut your energy bills by being more efficient? If you really need some extra money, you might want to consider a part-time job or renting a room in your home to a lodger.
If you’re struggling to make ends meet, you need to make payments such as your mortgage or rent a priority. Making payments for unsecured loans are not as important because you don’t stand to lose your home if you fall behind on payments.
When you’re in a position that all your expenses are covered, it’s time to seriously consider saving. Not just for holidays and vacations but emergencies and your retirement. If you’re working, check whether your employer has a retirement plan you can pay into.
Have an Allowance
Taking care of your expenses and savings means there’s some money left for you. Give yourself an allowance each month that you can spend guilt-free. However, remember that when it’s gone, you’ll have to wait for your paycheck to come around before you treat yourself some more. On the flip side, anything you don’t spend can be carried over.
You know how hard you work for your money every month, so find ways for it to work hard for you and life will suddenly become much less stressful.