When you have a solid grasp of your personal finances you will be free from stressing out about money, your bills will be paid, your financial goals can be met. Many of us get out of school without ever having taken a course in personal financial management. We are taught logarithms and the order of the planets in our solar system – but few of us are taught how to save enough for retirement or how to understand interest on a 30 year fixed mortgage.
But it is never too late to adopt better financial management practices! Begin with these 4 Keys to Successfully Managing Your Personal Finances.
1. Know your goals
The first step to managing your personal finances is knowing what your life and financial goals are. Your finances affect many areas of your life. For example, your goals to buy a house, start a family, or move across the country are affected by how you manage your personal finances. Your goal to travel the world or to retire early is dependent on how well you handle your finances today.
Once you know your goals, prioritize them. You may be able to have it all – but you may not be able to have it all at the same time. You want to ensure that you are working toward the goals that are most important to you. It is important to also actively work toward your long-term goals, like saving for retirement, as you are working toward and achieving your more short-term goals. It is never too early to begin saving for retirement
2. Craft a Financial Plan
Without a plan on how to reach your goals, it is unlikely that you will reach them. Your financial plan should be designed around your life and financial goals.
Your plan should be multi-tiered and include short-term actions and long-term planning. Of course, your plan will be fluid and flexible over time, but it’s important to have a framework in place. Your plan should include building an emergency fund and investing in your retirement. If you have debt, eliminating that should be a priority.
Your plan’s primary key to success is your budget.
3. Your Budget
Own it, embrace it. Make sure you have a reasonable budget that you can and will stick to. For guidance, read our articles How to Budget – Without a Budget, A Practical Strategy and 5 Steps to Create A Solid Budget.
4. Seek Financial Advice
Many of us are taught that it is not appropriate to talk about money or our finances – and in certain situations or environments that may be true – but realistically, if we do not talk to our trusted family, friends, or even a financial management professional, we are missing out on knowledge, tips, and advice that could truly benefit us.
Don’t be afraid to ask for financial advice from the people you trust. Do you have a wealthy aunt who seems to know a lot about investing? Take her to lunch and ask her to teach you a few things. Do you have a cousin who was able to retire at 50? Invite him over for dinner and ask him about what investments helped him reach his goal of early retirement. Most people are flattered to be asked for advice and will happily share their knowledge.
Find out more about being debt free in our guide: All About Debt Relief
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The Law Office of Barbara B. Braziel helps people get out of debt. We offer free consultations to people of Savannah, GA and the surrounding areas, including Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, Ludowici, Springfield, Pembroke, Brooklet, and Garden City.
We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.