3 Steps To Regaining Control Of Your Finances

Sometimes, it can feel like money has more control over us than we have over it. This is often the case for those who spend a lot of their time living from one paycheck to the next. However, you don’t have to be earning a huge income to have control over your own finances. Developing a sense of control over your financial situation is often as simple as re-assessing your relationship with money and developing a plan that makes sense according to your money-related goals. To help get you back on the right track, we’ve put together these top steps for recapturing control of your cash.

Actively Assess Your Spending Habits

A lot of the spending we do these days is passive. The chances are you have a number of payments leaving your bank account on a regular basis for everything from mortgage and rent costs, to insurance payments. The biggest mistake you can make is failing to assess these costs on a regular basis and ensure you’re not paying over the odds. Looking at your bank statements can give you an interesting insight into where the majority of your money goes each month. You might discover you’re spending a fortune on interest for your old existing loans, you can look to an Earnest student loan refinance to lower your monthly costs. You could also discover you’re spending too much on weekly grocery shopping and make a decision to cut how much you spend on branded items of food.

Set Financial Goals

If you want to feel like you have real control over your finances, you need to also feel like you’re making progress towards something with the way you use your money. With that in mind, ask yourself what you want to accomplish both in the short-term, and the long-term. You can start with simple goals, like trying to save at least 5% of your earnings every month towards a long-term goal like going on a dream vacation. You can also look at setting deadlines for when you want to reach your financial targets. You might decide you want to have enough money to put a deposit down for a house in the next five years. If that’s the case, you can plan how much you’ll need to save each month to reach your target. If you do not think it’s possible to do this with your current income, consider one of the many unique ways to make money that you could do on the side, even if only briefly, to help get you closer to these goals.

Build Emergency Savings

Finally, one of the best ways to retain control over your finances, is to make sure you have a way of handling unexpected issues. No matter how prepared you consider yourself to be from a financial perspective, there’s many reasons to have an emergency fund, the most obvious being there is always a chance something could go wrong in your life, leaving you with a bill you hadn’t anticipated. Emergency savings will stop you from having to dive into your cash reserves, or change your entire budget just because of an unexpected expense. Having at least 3 months’ worth of income squirreled away will give you excellent peace of mind and should ensure you’re equipped to tackle any issue that comes your way.