3 Personal Finance Tips to Help You Take Control of Your Money

Since I was very young, I have had personal finance strategies and rules drilled into my head. I can't remember a time when I did not know about savings, credit scores, interest, budgeting, and the evils of debt. While I am in no way perfect at managing finances, I would say that I do pretty well, especially considering the challenges that have come my way. Having only one source of income for my family for the past year has been a struggle but I am happy to say that the only debt we have is our mortgage. Somehow, we have managed and we continue to float on. Below are my personal finance tips.

Create a Financial Calendar

To make sure bills are paid on time and that there will be enough money to pay them, I have found it useful to track my finances on my calendar. By keeping track of days when we get paid when bills are due, I eliminate the need to keep a mental reminder of these things. Mental reminders can get forgotten which creates late fees and unnecessary stress. The way I usually do my calendar is I write "payday" on the day I get paid and what bills need to be paid before the next payday. If there is plenty of income (like when we have two sources of income) I pay the bills that I have received statements for as soon as I hit a payday so they are paid plenty in advance. I usually limit one big bill to each payday and alternate. For example, our two largest bills are usually our mortgage and credit card, so I alternate which one we pay on each payday.

Learn to Budget

In my experience, I don't do as well with the predetermined amount of money divided up for each specific category of expense. Rather, what has worked for me is determining a specific percentage of our income to go to a few basic places. For example, I struggle with determining specific percentages of our income to go to clothing, food, entertainment, etc., because some categories overlap, we don't buy clothes every month, and just because we make more money one month, doesn't mean we are going to spend more money on food that month. Instead, I determine a percentage of our income to go to savings, a percentage to go to retirement, a set amount that goes to our recurring and consistent bills (mortgage, cell phones, utilities, etc.), and whatever is left over can go to the things that vary, such as groceries, eating out, entertainment, a luxury item, etc. This helps ensure that money is being saved and our spending isn't out of control.

Save for the Unexpected

Sometimes things that cost a lot of money come up with little to no warning. In my experience, this can be a major car fix, giving birth at a hospital not covered by my insurance, an emergency room visit, an appliance going out.... There really are so many things it could be. It is a huge relief when the money is there and we don't have to scramble and panic about where the money is going to come from. For this reason, we try to keep an emergency fund built up in case something expensive were to come up. In my experience, a minimum of one month's worth of income is a good emergency fund to have.