Did you know that 70% of Americans have less than $1000 in savings? This won’t go far in an emergency situation and is a testament to how most people are living from paycheck to paycheck.
If you’re one of these people, it’s time to get your finances in order. Check out these top 4 personal finance tips to help you do just that.
1. Track Your Spending
How can you hope to be financially savvy without knowing how you’re spending money? Once you start tracking your spending you’ll likely be surprised by how much money is going to certain things in your life that you would never have guessed.
But how to keep track of your finances? Lucky for you, there are plenty of simple ways to track your spending. Your bank app probably offers this feature already — all you have to do is set it up!
Otherwise, start using an app such as payactiv.com that makes tracking and saving easy.
2. Create a Realistic Budget
Tracking your finances will give you the data you need to create a realistic budget. If you actually spend $400 on groceries each month, you need to budget for this rather than putting aside only $200 for groceries each month.
With your monthly spending habits and income, you can come up with a budget that makes sense to you. Avoid making a strict budget that you’re likely to go over every month.
Your budget should encourage good habits rather than set unrealistic limits on your life.
3. Pay Yourself First
If you’re wondering how to save money, then turn to the age-old adage, “pay yourself first.” Many people tend to save the money that’s left over at the end of the month which isn’t effective at all.
Even if you’re working with a super tight budget, you should get into the habit of depositing money into a savings fund as soon as you’re paid. This helps you to get out of the habit of treating savings as if it’s optional.
Regardless of how small the amount is, determine how much you can afford to save each month and put it away automatically.
4. Get Your Taxes in Order
Financial success starts with the small things — such as getting a grip on your taxes. This is especially important if you’ve just started earning a salary.
Educate yourself on how income tax works and how to do your taxes without error. Most importantly, find out what deductions you’re eligible for as this can save you a lot of money each month.
There are tax software options to assist you in filing taxes. Start early in every tax season to avoid paying penalties.
Implement These Personal Finance Tips Today
It’s never too late to get your finances in order and with these personal finance tips, you’re armed with the foundation you need to get started. Stop living from paycheck to paycheck and aim for financial success.
If you’re interested in learning more about personal finance then you’ll love the rest of our content. Keep exploring for more articles to help you reach your money goals!