We all know how important being financially responsible is..you owe it to yourself, your family, and your kids. There is nothing like the feeling of being financially secure; knowing you are going to be OK if the SHTF (and it will!). That is why I have worked so hard to get all of my money working for me and all of my ducks in a row…for the time that “what if” might happen. That all being said, I thought I would assemble a list of what I thought were the most important steps for you to take starting right now so that you can be more financially secure:
1. Save, save, save. Every time you get paid, you should be setting aside at least 10% of your paycheck for yourself. Pay yourself first, they say, and I cannot agree more. What is the sense in working if every dollar you make is going right back out the door? Make it automatic; have the bank automatically take 10% of every check and put it in a savings account. After a year of this, you will not believe how much it adds up to, and after a while, you won’t even miss it.
2. Stick to a budget of some sort. I do not budget down to the penny, but I do monitor my spending and watch my accounts on a weekly basis. It is what works for me. If you know you can afford X amount for food every month, stick to that plan. If you can afford to go out to eat twice a month, make sure it is only twice! Budgeting to the penny can be frustrating and time-consuming, but making a general budget is much easier on the brain and will still keep your spending in check.
3. Pay off all your debts! If you have credit card debt, make this the first step. There are a few methods out there to get that debt down, but the most effective for me was the snowball method, where you concentrate paying down one card at the time, and after each card is paid off, move that payment over to the next card along with the minimum you were paying on it. Eventually your debt will be gone. What a feeling that is!
4. Get organized. There is no way you can track all of your expenses and income if you have no idea where anything is! I have a great filing system set up that lets me access my info on any account at any time very quickly online. Also, you could use an online account that combines all of your accounts onto one page, so you only have to look at one site. Mint and Yodlee are great sites for this.
5. Set goals for yourself. What is the use of money if you do not have any goals for it? Whether it be a new car, moving to a better place, starting a business, or paying for your child’s education, you need to set goals. What better way to stick with a budget than knowing that you are doing it for a reason?
These 5 steps I think are the most important ways to becoming financially responsible. Sure, there are many things that could be added to this list, but in general, these are the steps I followed in order to get to the place I am in today. Start today – tomorrow is too late to start planning!