As the first three months of the year come to a close, it may be a good time to assess your financial goals and what you’ve achieved so far. If you didn’t set any goals but are interested in doing so now, it’s not too late.
One of the first steps towards achieving financial health is to outline your goals. What do you wish to accomplish by the end of the year? Once this is established, create a budget and track your expenses.
Budgeting
Budgeting is a great way to set financial goals and work towards them. For example, if you want to save for a down payment on a house or start a small business, you can create a budget that includes a savings plan to help you reach that goal. Read about rules for smart money planning.
But where do you start from, you may ask? Using a spreadsheet, outline your income and expenses to give you a sense of where your money is going. This helps you to identify areas where you can cut back on expenses. And push yourself to make those hard decisions to remove unhealthy spending habits from your list. Budgeting helps you to be more in control of your finances.
Tracking expenses
Once you have created a budget, start tracking your expenses. You can do this by keeping all your receipts for purchases, especially big-ticket items such as electronics or furniture.
Alternatively, you can use a budgeting app to track expenses. The good thing about these apps is that they’re able to categorize your spending and provide you with reports that show where your money is going.
Generally, by tracking your expenses, you become more aware of where your money is going and how much you’re spending. This can help you make more informed decisions about your finances and prioritize your spending.
Budgeting and expense tracking are great tools to help you avoid overspending and living beyond your means, which ultimately yield better financial health. When you have a clear understanding of your finances, you’re less likely to feel overwhelmed or stressed about money.