Life certainly does move pretty fast. The week flies by with work and family obligations, and the weekend comes to try and relax and catch up around the house, but some well needed fun is to be had, then pretty soon, it’s back to work on Monday. Once you get into a routine it can be tough to get out, so if you don’t take a hold of your finances now, you can continue down a path of careless spending until you’re up to your neck in debt, with nothing saved for the future. While that may be an extreme case, most of us do live paycheck to paycheck, so it would be wise to get ahead with your finances starting now.
Create an Emergency Fund
You could be plugging along with paying the monthly bills, coming out with just enough money coming in as going out, and then all of a sudden you get hit with an expected vet bill, auto repair, or the need to replace a home appliance, and all of a sudden, your budget is thrown off. If you don’t have anything saved up, it will have to go on a credit card, and then monthly payments can now be added to the monthly expenses until paid off. If you’re able to save up a few months’ worth of expenses, you can give yourself the needed cushion in case any unexpected charges come up.
Track Spending
It’s not surprising that most do not have a household budget, after all, it can be tough to allocate certain funds for all monthly expenses, especially if you don’t know how much you’re currently spending in gas, food, entertainment, etc. By taking last month’s credit or debit card statement you can begin to look at every dollar that is going out, while at the same time, putting spending under a microscope so that you can ensure that the unnecessary purchases decrease and you watch your account balance improve month over month.
Take Advantage of Credit Card Rewards
Now this is where you need to be careful, because if you spend more than you can afford to pay off in the statement balance every month, carrying over a balance and paying interest will trump any credit card rewards you have earned, but if you’re able to spend responsibly, you might as well earn free money on what you would purchase anyways. With a rewards credit card, you can earn points or even cash back on the purchases you made, in which otherwise would have been left on the table previously.
Don’t Forget to Save for the Future
While retirement may be the furthest from your mind, that doesn’t mean that saving should be out of the picture. The earlier you start saving, the more it has to build over time, so if you get in the habit of contributing, you can increase contributions every year as you watch the balance increase. Look for employer-matching contributions at work, as you don’t want to miss out on this free money that could add up to thousands of dollars a year.