Take Control Of Your Finances

It’s time to take control of your finances! Have you heard that before? But what does that mean? How do you do it? In this article I will be speaking on what I’ve done personally to get my finances on a great trajectory.

This article isn’t directed to the “poor”, “middle class”, or even the “rich/wealthy”. This article is for anyone who is looking to make improvements to their finances. It doesn’t matter how much you make or don’t make, but how well you manage the money you have coming in.

START WITH THE BASICs

What are the basics? To me, the basics is spending less money than you spend on a monthly basis regardless of your income level. The only way you can identify this is by starting to track ALL income and ALL expenses. Once you can identify how much money you have coming in regularly and identify where your money is going every month, you can then start taking some ACTION to improve your finances.

This is what I do…

INCOME: I record all my income in one large category, this would include income streams such as; career, business, bank interest, uber, tips, gifts, etc..

EXPENSES: This includes ALL the money you spend in any given month. I like to break these down into a few different categories; FIXED expenses, VARIABLE expenses, and NON-ESSENTIAL expenses. Below is a breakdown of what I categorize in these groups

• FIXED EXPENSES: Rent, water, electric, insurance, investments, internet, phone bill, etc

The predictable, non-changing expenses

• VARIABLE EXPENSES: Gas, groceries, transportation, appointments, etc

These items are still necessary, but these vary in cost from month to month.

• NON-ESSENTIAL EXPENSES: Music subscriptions, Concerts, Sporting events, Retail stores, TV/Streaming services, fast food/dining out.

The WANTS you have that aren’t necessary. (easiest to cut out)

Now that you have a basic understanding of the above items, you can start identifying what you NEED in your life versus IT’S NICE TO HAVE (WANT) in your life.

When you start tracking your finances, you need to track EVERYTHING. If you don’t, you will only be hurting yourself. The more transparent you are with yourself with your finances the better off you will be long term. Track one or two months to give yourself an idea as to where you can start cutting some of your expenses. 

The areas I would recommend cutting first would be TV/music subscriptions, Gaming systems, fast food, and retail store items (apparel). This isn’t easy to do if you are in the habit of spending. The ultimate goal is to get in the habit of SAVING. In other words...SIMPLIFY YOUR LIFE. You DON’T NEED that new car, new phone, watch, shoes, etc. just because it looks nice and others have it on Social Media. If you see these on Social Media, there’s a high chance that individual is in debt. What I’ve learned over the years is that if you are in debt, you don’t DESERVE anything until you can pay it in full (outside of a home).

If you are in your 20’s reading this, it is common to not have a lot of money in your account. You’re fresh into college or into your career and haven’t experienced the full effects of ADULTING with finances. (I haven’t experienced everything yet myself). Don’t sweat it though, you can start building your savings and budgeting habits at any time. In a span of 5 years, I have nearly doubled my career income and started producing revenue in my companies in my “free time”. Your finances are all dependent on your daily/weekly/monthly spending habits.

TO RECAP…

No matter your financial situation, you can always improve your finances. Start small, and start tracking all your cash flow.  Identify where you feel you are overspending on a monthly basis, simplify your life. 

1. Eliminate your debts first. 
2. Learn the difference between a WANT and a NEED. 
3. Be patient with your finances and be consistent with your own implementation. 

If you can’t manage $50,000 properly, you won’t be able to manage $500,000 well either.

Disclaimer: I am not a financial advisor, nor have I gone to school for financing. All the above content has been written based on personal experience with some guidance from mentorship and what I have found to work for me. Everyone is in a different financial state and sometimes it can be a touchy subject thinking about or discussing one’s finances.