Know Where You Stand Now
The first step in getting a handle on your personal finances is to know your current situation. How can you make a plan to improve your situation if you don't know where you're at right now? So, make a budget that only tracks the money coming in and going out, along with where it goes. Don't try to change how you spend money for the first month or two -just watch how your finances currently work. Use that as your basis for building a better budget moving forward.
The Impact of Today's Choices
Saving and investing work best if you start early. Because of compound interest and long-term market trends, you will make more money. Understand that concept and start saving for retirement or college now. Don't put it off for ten years to buy a new car. Each month, put money into investments instead of a more expensive cable package. This really will make a BIG difference down the road. If you want to change your situation, you'll need to sacrifice a little bit first.
Apply What You Know
Most Americans understand basic financial topics; they just don't know how and when to apply that knowledge in the real world.
The
best way to apply what you've learned is to start with one action at a
time and turn it into a habit. For example, "pay yourself first,".
Meaning, save before you start spending rather than saving the
leftovers at the end of the month. Talk to your bank about
automatically moving funds from your checking to savings account. This
will make saving much easier. Where do you want to be in 10 years? 5 years? By learning to apply the concepts you already know, you'll set yourself up for less stress and greater success.
