How to Take Control of Your Money This Year

A new year usually comes with lofty goals for revamping our financial goals. Taking

control of our money can change our life, but it can also feel extremely overwhelming.

Our money habits and beliefs come from our life experiences. How we grew up, past

choices we have made and mimicking those we spend the most time with. It is possible

to learn new habits and beliefs about money! It just means we must take control of our

finances.

We need to establish clarity, confidence and direction to take control of our money.

First, we must face the numbers. Gather all your bank statements, credit card

statements and begin digging in. It is crucial for financial success that we know our

income, expenses, all debt with interest rates and balance details as well as total

savings and interest rate. Learning where our money is going and creating a list is step

one to financial independence where money works for us and not the other way around.

Once we know what our expenses are, we can then break them down into fixed

expenses such as rent/mortgage are, utilities, gas, groceries, car payments, to better

understand which expenses are necessary and which you could eliminate or cut back.

By being aware of our full financial picture, we are giving ourselves power over our

finances.

Next, define what “control of my money” means to us. Does it look like having an

emergency fund, or is it eliminating all your debt or both? Perhaps it no longer works to

just live paycheck to paycheck anymore. Saving for retirement might be at the top of the

list. Whatever the financial stability goals might be, we must be clear about what they

are and how we plan to succeed to meet our goals.

Build a simple, realistic budget that you can easily track. Include all the fixed expenses,

variable expenses, savings accounts and debt repayment. Automate what you can with

auto pay and setup auto transfers to a savings account for a safety net with the goal of

avoiding NSF or OD fees. The more we make our budget and systems work for us, the

less complicated it feels to reach our goals.

Include annual expenses in the budget for expenses that pop up throughout the year as

well. (such as holidays, birthdays, home maintenance, car repairs.) Setting aside

savings for these expenses each month will eliminate the stress of having to cover large

bills and throwing off the entire budget.

To be successful at taking control of our money, we have to have the right mindset.

Most of us will need a mindset shift when going through this process. Taking your

finances from a place of chaos and the unknown to clarity and confidence is key in

reaching financial freedom.