6 Ways to Take Control of Your Finances
Show your money who’s the boss with these six ways to take control of your finances. The best way to deal with the scary world of debt and bills is to learn how to take control of your money.
These steps towards financial freedom for women are from Lois Frankel’s Nice Girls Don’t Get Rich: 75 Avoidable Mistakes Women Make With Money. “You can avoid reality, but you cannot avoid the consequences of avoiding reality.” ~ Ayn Rand. If you’re not taking control of your money, sooner or later you’ll face the consequences of your inaction (or your irresponsibility – ouch!)…and it won’t be pretty.
If you don’t have a source of income, read Best Jobs for Introverts and Quiet People. And, read on for six ways to strengthen your sense of personal finance and show your money who’s the boss…
6 Ways to Take Control of Your Finances
The biggest thing that confuses and scares me about money is retirement. I’m 41, and just starting to wonder how I’ll support myself when I retire! Getting $200 a month from the government (pension) won’t get me far, and I haven’t contributed much to my RRSPs.
I need to take control of my money more than anyone – especially since I’m self-employed as a writer and blogger!
Schedule regular “retire rich” or “find financial freedom” time
Schedule time to figure out your financial goals. If you’re confused and scared about money in retirement, like I am, then start learning about government pensions and savings plans. What exactly are you scared or confused about – do you need to learn about basic personal finances, figure out where to invest $100 a month, or learn how to put money towards your retirement or children’s education?
Block off an hour a month (or an hour a week) to start taking control of your personal finances — and read 10 Tips for Achieving Financial Goals – Beyond “Use Cash”.
Identify the flaws in your personal finance plan
If you’re not financially independent, then figure out where the wheels fell off the bus. Are you charging up your credit card bills and avoiding your student loan or mortgage loan debt? Are you financially supporting a spouse or family member when they should be doing it themselves?
The sooner you uncover the reasons you’re struggling with money, the more in control you’ll be. You really have to know your weaknesses before you can show your money who’s the boss.
Attend one personal finance course or investment seminar a month
“You can find these classes at community colleges, extension programs, credit unions, and even online,” writes Frankel in Nice Girls Don’t Get Rich. “Many investment firms offer short evening programs designed for the financial novice.”
If you’re going to a seminar at an investment firm, resist their sales pitches. You’re there to learn as much as you can about investing your money, building your retirement income, and living within your budget. Don’ t make major financial decisions when you’re confused and scared about money.
Learn where your money “should” be going
Financial experts say your income or earnings should be divided up in specific ways. For instance, 10% of your income should be going to savings or investments, 25-40% to mortgage or rent, 8-15% to home-related expenses, 10-20% to food, 15-25% to transportation, 8-15% for medical expenses, 3-5% for clothing, 5-10% to personal or miscellaneous, and less than 5% to personal debt such as student or personal loans.
If you’re spending more than these suggested amounts, then it may be time to consider shifting your expenses. One of the best ways to take control of your money is to go back to the basics: a household budget.
Do you need to make more money? Read 30 Ways to Make Money on the Side.
Take care of your credit rating by balancing your checkbook every month
“If you’re one of those women who make deposits but don’t reconcile their checkbook, then you’re more likely to treat money as dispensable – not something that has to be cared for and looked after,” says Frankel. She encourages women who want to be financially independent to reconcile their accounts every month (or more often!).
Your financial decisions directly affect your credit score, which affects your ability to get mortgage or business loans. Even if you think you’ll never want to start a business one day or own a home, you should start building a good credit rating.
Remember that you can control your finances – they don’t have to control you
Ayn Rand said, “Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.”
Maybe you were taught to let men manage money when you were growing up, or that money isn’t feminine or ladylike. Banish those thoughts! Remember that money is just a tool to help you enjoy life – it’s doesn’t have to be something to avoid. Use your “financial freedom time” to learn as many money lessons as possible.
The only person who can stop you from achieving financial independence is you. Get out of your own way!
If you need money to pay off your debts, read How to Deal With Your Money Problems.