Six Tips to Help You Be More Responsible With Your Personal Finances

What will be your thought when you think about personal finance? If you’re like most people, you may associate personal finance with your bank account and the things that you can purchase with it. However, true personal finance isn’t about how much money you have in your savings or checking accounts.

It’s about teaching yourself valuable financial lessons that help you control your future finances and make wiser spending decisions in the present.

Here are six helpful tips to get started with being more responsible with your personal finances,

1. Take control of your finances

2. Understand what you’re investing

3. Create a budget

4. Don’t sacrifice your financial goals

5. Learn the true value of things

6. Start saving early

• Take control of your finances

If your finances are like a hot mess, it’s time to take control. Although some people find it easier than others, becoming more responsible with your money can be done. Follow these six tips and you’ll be on your way. We promise that if you commit, you’ll feel great about how much control you have over your money management habits:

1. Commit – Commitment is what separates the doers from those who never start. Setting aside an hour or two a week (more if possible) will get things moving. Make a custom schedule for your activities and follow according to it.

2. Get rid of credit cards – Now is a good time as any to cut up any credit cards and only keep one on hand for emergencies only.

• Understand what you’re investing in

There are a lot of investment options out there, but they can get confusing pretty quickly. To avoid over- or under-investing in an area that doesn’t fit your risk tolerance, be sure you understand what you’re investing in. For example,

• Is an option available to you safer or riskier than what you want?
• What does risky really mean in practical terms?
• Are there any implications for your situation that could affect what kinds of investments make sense for you?

By understanding each potential investment’s details and ramifications, it will be easier for you to make smart investment decisions.

• Create a budget

Create a budget and record the incomes and expenses. This will not only help you better understand where your money is going but also give you a better idea of how much money you have to spend on other things. Not all expenses are created equal, so it’s important that you break down what’s most important and what can be cut back on.

If you need some extra help with your finances, there are professionals who can walk you through things step-by-step—from setting up a budget to finding ways to save. In most cases, these services aren’t free, but it’s usually worth it for someone else to sort out such an important task for you.

• Don’t sacrifice your long-term financial goals for short-term happiness

Our society makes it easy to spend money on things we want now and avoid thinking about our long-term financial goals. And yet, there’s a lot of evidence that impulse purchases. For example, a new handbag or pair of shoes don’t actually make us happy.

If you need help curbing your spending, set a spending limit for yourself (say $100 per month), and use an app for help keeping track of where you are in relation to your goal. This will allow you take a step back from some impulse buys so that you can focus on living well within your means.

• Learn the true value of things

Before we buy something, it’s easy to have a rosy view of its potential value in our lives. But if you’re shopping with a budget, it’s important that you learn how much things actually cost before you buy them. Start tracking your purchases, and ask yourself:

Do I need an item right now?

Can I wait until later for its more affordable off-season version?

Could I get by without buying anything at all?

Establishing a baseline for true value will help keep you from spending beyond your means.

• Start saving early

If you want to become a responsible saver, start as soon as possible. It may seem obvious, but it’s one of those common sense things that many people overlook. The biggest secret of all time is that while it may be hard to save your way out of debt (unless you’re extremely disciplined), it’s nearly impossible to get out of debt without any savings at all.

So if you have debt and no savings, start by making an aggressive commitment to becoming a responsible saver. Set up automatic deposits into a savings account and try setting aside 10% or more on top of what you already pay toward your debts each month.

( If you wish to Watch a cool video explaining this topic – CLICK HERE )

Author’s Bonus Tip

Be consistent

Small savings add up over time, but only if you make a point of it. If you have a few hundred dollars in your checking account and you save $10 per week, it’ll take you six years (312 weeks) to build up a tidy little emergency fund.

The key to be consistent is relay on your savings. Just be sure not to overdraw your account. By these simple steps you can improve your personal finance by a lot.