Quick Tips to Take Control of Your Finances and Live a Better Life

When you don’t have a financial plan, it’s all too easy to get into financial trouble. And when you get into financial trouble, it can lead to stress, which can affect everything from your personal well-being to your relationships to your productivity at work. Rather than giving money that much power in your life, learn how to tell your money where to go and what to do. Here are some quick tips for coming up with a financial plan and following through:

Revisit your auto insurance

Before you get into the details of creating a budget, consider the types of insurance you need in order to stay secure. This includes health, life, disability and homeowner’s insurance. Auto insurance, in particular, is often worth reviewing annually, because it can take care of you and your family if you ever get in a severe accident.

Each year, consider your current situation to determine if you need to weed out coverage or get additional coverage (e.g., full coverage, PIP). Make a point sure to get quotes from several agencies and compare rates and coverage amounts to find the most affordable policy that meets your needs. Remember, insurance isn’t just to protect your car or your house; it’s a safety net that protects you financially.

Map out a budget

If you want to take control of your finances, you need to have at least a basic understanding of how to create a monthly budget. This means recording all your income and expenses for each month to determine where your money is going and where it needs to go. Here are some common expenses not to overlook:

Rent/mortgage
Auto insurance
Car payment
Utilities
Entertainment (e.g., streaming/cable subscriptions, internet, recreational activities, etc.)
Gas
Groceries

Factor in all your living costs, as well as the money you’re setting aside for savings, so that you know how much is left over to spend on other things like dining out, clothes, traveling and so on. Each household is unique in its priorities, so you will need to determine which expenses are flexible and inflexible.

Once you have all the numbers on a spreadsheet, you’ll be ready to consider your priorities and develop a realistic budget you can stick to.

Determine an overall goal

A lot of people fail to stick with their financial plan because they don’t have a clear goal in mind. Base your financial plan around a single statement that defines your overall reason for budgeting. Here are some examples of what your statement could be:

“Debt-free in three years”
“Think about each purchase”
“Child’s college tuition”
“Financial security for the future”

Make this statement your mantra, and write it out in visible places (e.g., car dashboard, bathroom mirror, etc.) to remind you each day of your overall goal.

Learning how to control your money can significantly reduce the amount of stress you experience from day to day. Start by looking into your auto insurance, coming up with a realistic budget, and basing your financial plan around a single statement of your overall goal. Lastly, keep researching financial disciplines that can ultimately improve your life.
Citations