Today's post is by one of my favorite money-bloggers, Natalie Bacon at NatalieBacon.com.
Getting your finances in order can feel time-consuming, stressful, and never-ending.
I knew absolutely nothing about personal finance at age 25. Now, at age 31, I’m a CERTIFIED FINANCIAL PLANNER™ by day and a personal finance blogger by night. I've changed my financial future and learned how to take control of my finances. That’s what this post is about.
Here are eight easy ways for you to improve your finances today.
1. Create a monthly budget
Creating a monthly budget is one of the easiest ways to improve your financial life.
With a budget, you give your income a plan. This means that you plan what you're going to do with your income before you receive this, and you track your progress throughout the month.
Here are the budget spreadsheets I use that you can download from my site to get started with a monthly budget.
Tip: Trim helps you negotiate cable and internet bills, analyzes and gives you spending updates via text, and will find and cancel unwanted subscriptions for you. Trim users saved over $1,000,000 last month alone.
2. Track your net worth
With a budget, you plan for and track your income and expenses.
With a net worth statement, you track your assets and liabilities. A net worth statement is different than a budget but just as important. You don't need to update it throughout a given month (like a budget), but you should update it periodically (monthly, quarterly, etc.).
To track your net worth, make a list of all your assets (bank accounts, retirement and investment accounts, real estate, cars, personal property, etc.) and a list of all your liabilities (any debt, including mortgages, car loans, credit card debt, student loan debt, etc.).
Next, subtract your liabilities from your total assets.
This will give you your net worth (Assets – Liabilities = Net Worth). There’s a Net Worth Statement you can download in the budget spreadsheet download from #1 above.
The reason tracking your net worth is important is because it will show you a snapshot of your actual financial worth.
Over time, this becomes increasingly important as you build wealth and save for retirement.
Tip: Cushion is an app that refunds bank and credit card fees. You can expect refunds on things like late fees, overdraft fees, monthly service fees, account maintenance fees, ATM fees, credit card interest charges, late fees, and more!
3. Start reading a personal finance book
Reading a personal finance book can help you learn about money.
You can't plan for what you don't know how to plan for. Personal finance books can easily be the solution to giving you the financial knowledge you lack.
Start by reading one of the top five personal finance books I recommend. These are the money books that inspired me the most when I started learning about finance.
4. Dedicate 20 minutes in the morning or evening to learning about money
You can change your financial life in as little as twenty minutes a day.
I show you how this post, but the gist is to set aside a specific time of day every day during the week dedicated to learning about personal finance (reading personal finance books, reading blogs, listening to podcasts, budgeting, etc.).
The habit of spending only 20 minutes a day learning about money will compound over time and can make a huge difference in your financial life.
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5. Listen to a money podcast during your commute
A really easy way to improve your finances right now is to start listening to money podcasts during your commute.
You’re already in the car or on public transportation – why not use this time to master money?
A few podcasts that are really popular on iTunes and that I personally recommend are:
- Planet Money by NPR
- The Dave Ramsey Show
- Listen Money Matters!
- Bad With Money by Gaby Dunn
These are all free and you can use them either in your iPhone podcast app are on another podcast app you use.
6. Set financial goals
An easy way to improve your financial life today is to reflect on where you are financially now and where it is you want to be.
Get out a piece of paper or create a document on your computer and write down your goals for money.
When you write goals, use the SMART method (make your goals specific, measurable, attainable, realistic, and timely).
For a more detailed explanation on how to set goals, you can use my Goal Setting Action Plan.
A few examples of money that you might consider setting goals for are:
- Getting out of credit card debt
- Paying off your student loans
- Savings for a down payment on a house
- Making more money
- Maxing out your retirement accounts
These are just examples. Whatever you need to do in your financial life, set a goal for it.
Then, give it a specific deadline. Start out with only one or two goals so you’re more likely to accomplish them.
Related: 50+ Ways To Make Extra Money
7. Check your credit reports
Checking your credit reports for accuracy (and for protecting your identity) is a simple way to improve your financial life right now.
I have a how to check your credit step by step guide that walks you through exactly how to do this at each of the three bureaus (Experian, Equifax, and Transunion).
You can check your credit for free once a year at each bureau (and you should).
It’s the best way to make sure there’s no inaccurate information and that all the accounts listed are yours (i.e. that no one has opened up accounts in your name without you knowing it).
8. Think of one new way you can make money
If you’re feeling strapped for cash it’s easy to feel paralyzed and do nothing. That’s why it’s important that you do something – anything to move you in a direction toward financial success.
This is where making money comes in.
Brainstorm at least one new way that you can learn how to make additional money this month.
Research different ways to make money online, then decide which you want to do. That’s it for today.
Then, tomorrow take one more small action toward making it happen. You’ll be amazed at how much you can accomplish committing to one small action every day toward making additional money.
Bio: Natalie Bacon is a CERTIFIED FINANCIAL PLANNER™ by day and a blogger by night. She’s been featured in Forbes, CNBC, MSNBC, US News, The Huffington Post, and more. Read more about Natalie on her blog, NatalieBacon.com.
In a nutshell:
1. Create a monthly budget.
2. Track your net worth.
3. Start reading personal finance books.
4. Dedicate 20 minutes to learning about money.
5. Listen to money podcasts.
6. Set financial goals.
7. Check your credit score.
8. Think of a new way to make money.
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