Best strategies to control your finances
There are so many discussions about earning money, yet so little talk about effectively managing it. While building your wealth is essential, being able to effectively control your finances is equally important to maintain it. So as much as possible, you should be able to save, invest and spend your money in a systematic order in order to ensure long-term liquidity and stability. Therefore, here are some of the best strategies to control your finances.
Establish an emergency fund
Before you can start spending on wants, you should first ensure that your expenses for the next three months and any emergencies will be covered in case you lose your main source of income. Many finance gurus recommend establishing your own emergency fund. Preferably in a digital bank with high interest rates. Some digital wallets like Paxum, Venmo, and CashApp can also be a place where you can deposit your funds, but with no interest.
You can take advantage of the interest income you receive by just keeping your emergency fund untouched. Just ensure that the bank you deposit your emergency fund is secure from any future cyber-attacks. You can always add an extra level of account security to keep your funds safe. There are many resources online and regular reminders from the banks to keep you updated from protecting your information.
Create a budget
One of the most important steps of controlling your finances is making a budget. In order for your budget to work, you should estimate the amount of money you earn and the money you spend. Being able to project your cash flow gives you more control over your finances. With that, you can achieve your financial goals in an efficient and effective way.
Set clear financial goals
Setting clear goals permits you to stay focused and avoid any unnecessary purchases that lead to overspending. Start with planning your short term and long-term goals. Aside from setting goals, you can also set realistic timelines for each goal. Reward yourself when you reach your goals, but don’t go over the budget. Consistency is very necessary for you to achieve your goals. If it gets overwhelming, you can start by working on smaller goals, and work your way up.
Don’t live above your means
Living above your means that you get to spend more money. If you keep having a lavish lifestyle you cannot afford, you would end up living paycheck to paycheck. It is not bad to pamper yourself, but do not do this regularly especially if you still do not have enough savings. As much as possible, you should live below your means, but do not compromise your health and convenience just to save money.
Money, as liquid as it is, comes and goes so quickly depending on the person who handles it. So before your money takes control of you, you should control your finances and establish strong money managing habits. With that, you can enjoy saving and also be able to enjoy the rewards of effective money management.