Two years ago, I was a financial disaster. I was ignoring my student loans, waiting until the very last minute to pay my utilities (to the point where I was making excuses for why they were being cut off) and dodging collection calls – and I work in finance! Over this past year, I have really perfected the way that I live and budget my finances, and must say I am a happier woman for it.
Now, if you are curious as to what changed two years ago, I’ll tell you. I met a man who was extremely financially stable. I mean I listened to him for 30 minutes as he told me about all the insurances he carried, what they mean, why and how they protect him and all the time thinking to myself, I don’t have insurance at all. Seeing someone my age, on a similar rung of the corporate ladder have his life so organized in comparison to my own was really eye-opening. So without him knowing, I started to make changes to my lifestyle and budget in an effort to become just as financially stable as he was. Now that I have organized my life, I want to do what I can to help our consumers do the same. Here are some suggestions that can get you started on the right path:
- Start a budget
If in reading our previous blogs, you have not already done this…shame on you. Just kidding, we forgive you. Starting a budget can be a daunting task and I have tried so many methods. I’ll tell you what works best for me, but everyone is different and learns differently so let me share the most common methods I’ve found.
- Envelope Stuffing
Dave Ramsey, has transformed lives using this method. Essentially he has you assign every penny you make at the beginning of the month and stuff those pre-allocated funds into envelopes that you use for your spending. The plan works because it creates a visual, since you have to physically pull the money out of the envelope and see what you have left as you go. This wasn’t my favorite method because I hate carrying cash around with me. I can be a bit flighty, and the thought of me leaving my entire month’s funds hanging on the back of a restaurant chair, was too much. That said, this is a super successful method for millions of people and worth checking out. #notsponsored
- The Spreadsheet
If you are handy with excel, make your own budget spreadsheet. If you aren’t, the internet is a beautiful thing. There are a lot of free downloadable sheets that can be used to track your income and expenses and I’ve tried a LOT of them. Don’t just stick with the first one you find, search for one that you like and think you can keep up with regularly. There are a lot of great options here that you can try.
- Online Financial Software
Mint.com is probably the most well-known financial software out there but it allows you to create a budget and track your expenses, all on your smart phone.
- The Planner Method
This is the option I landed on after my many trials. I find that physically writing out my budget each month helps me stay dedicated to it. I bought an expensive monthly planner that I use every day and on the monthly page, I track my budget. Each month, I write out my current balances in my checking, savings, student loan, car loan, and credit card. I map out when my pay dates are, when my bill payments are due, and keep a list of what purchases need to be made that month. Every week, I give myself an amount of spending money for food/gas/entertainment, and then every day I write down how much I spend. Being able to see this on a monthly, weekly, and daily scale has worked for me. Now pick your favorite, and get on it!
- Automate Bill Payments
If you can, set up every bill on auto-pay. This was a lifesaver for me. As I mentioned, I was the worst at paying bills on time. I would lose track of them and the dates they were due. I would even have the money to pay them but think to myself, I could pay this bill…or I could go to Target, and then actually go spend the money on stupid things I didn’t need. When your payments are automated, it trains your brain to NOT spend the money. The reason this item is second on the list is because you have to know your budget first and keep monitoring your spending to avoid over drafting your account with an automatic payment.
- Budget Dedication!
The last step to organizing your finances is to KEEP UP WITH IT. I tried and failed many times at keeping up with a budget. It was too hard, too time-consuming, insert additional excuses here; but ultimately, a budget doesn’t work or show any sort of improvement unless you dedicate yourself to it long-term. So do what I did, try and then fail, until you find the method that works best for you. In the grand scheme of things, taking the time to find your perfect budgeting style, will only help you succeed and stay on track to whatever financial future lies ahead.
The past two years of my financial journey are just the start. I still have debt I’m paying off, but I’m paying it. I’m saving. I’m not spending all my money on coffee and shoes, and I’m more mature and responsible for making these changes. So get organized, start that budget and stick to it. Trust me when I tell you, you will be better off for it.
