Finances can be tough. Budgeting, paying bills, curbing debt, the whole works, can be daunting. Can seem fruitless. A Sisyphean effort. But with some simple steps and routines(I know how that sounds) it can be, if not easy, manageable.
I was a bank teller for two years and a personal banker for one. I don't think this necessarily means I'm better with money than anyone else but looking at peoples accounts, observing their spending, their budgeting or lack their of, going over credit reports etc. day after day, month after month for three years it provided me with an awareness that has been helpful for my own finances. So those are my bonafides, such as they are.
1. Know your balance. Check it once a day online and as you spend try to keep an internal calculation. The more you practice this the more it'll become innate. Depending on your income you should know your balance to the approximate third, second, or first digit(excluding cents).
2. Budget. Income may vary but it shouldn't be too difficult to determine an approximate for each month. Take the total subtract monthly bills, divide that by four, and that's the amount you can spend each week. As each week goes by subtract your spending from this weekly allotment, either in your head or on paper. Of course things come up and sometimes they'll be a special event that requires a bit more spending but the closer you can adhere to this, keep this weekly allotment in mind, the better. The more weeks you do this the more innate this becomes.
3. Have a credit card with a reasonable balance. You should have a credit card in order to help build your credit as well as have an additional layer of funds to tap into if needed. A minimum limit card doesn't offer that much assistance in the event of financial difficulty but a large limit card can be unwieldy and have a high interest rate. A good rule of thumb is you should have a credit limit that, if maxed out, wouldn't take you more than a year or two to pay off.
4. Participate in your 401k. If your job offers a 401k the sooner you can begin contributing to it the better. If slicing off a portion of your income is worrisome contribute the minimum amount, 1-2%, this will most likely be relatively negligible in regard to your monthly spending. Ideally if your company matches you should work up to contributing whatever percentage that they will match up to to get the most benefit. However depending on your situation the smallest contribution is a good place to start and then work up from over time.
5. Open a savings account. Given interests rates being what they are there isn't a whole lot of options for short term return so a low interest savings account is a good option for putting money away because its accessible and the difference between the potential return on a savings account and a CD are relatively negligible. Typical savings accounts have a minimum balance of $500, you only want to open one when you know you'll be comfortable not accessing that base amount. You can then begin contributing a small amount to it each month or each paycheck. There's no point in opening a savings account but then dipping into it a couple months later. Make sure that amount you open the account with is truly disposable income. It's the bedrock to begin your savings, whether its for emergencies, down payment on a car or home, a child's college, what have you.
Income is going to dictate the degree to which the above can/should be implemented but in my experience awareness is the key. The reason people get so twisted up and in trouble with money is because they don't think about it until they don't have it, are faced with a bill they can't pay, and by then its too late. With a little bit of structure and discipline spending will fall roughly in line with income.
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