Making money isn’t easy and becoming financially secure is about more than just saving up money in your bank account. Finances are dynamic, so you need simple ways to break them down and measure your various expenses to ensure you stay ahead. Even if you’re just starting your career, it’s not too early to think about retirement.
With so many years ahead and so many to plan for, incorporating these two metrics into your budgeting will take off the stress of wondering whether you’ll have to work the rest of your life:
- Net worth
- Monthly spending
Feeling Motivated About Your Finances
One of the hardest things to do when you’re trying to save money is to feel like you’re actually getting anywhere. When the majority of your income goes to survival, it’s natural to feel like any little income you have left over isn’t worth much.
First, you need to shake the notion that you need hundreds or thousands of dollars in reserve to become successful. You can’t reach a comfortable position until you’ve been uncomfortable for a while. Even $10 a month in your savings account is better than none.
A budget isn’t designed to remind you how far you have to go. With the right strategy, a budget can track your progress and inspire you by reminding you of how far you’ve come, one day at a time.
Know Your Personal Net Worth
Your net worth is the sum of your assets. The goal is to own more than you owe. Many people have their finances all over the place – their 401k is with one vendor, their student loans are through another and other investments aren’t even accounted for yet. Keeping on top of debt, stocks and other investments can become tedious and overwhelming, so it’s best to find a way to streamline your assets and expenses.
To see the big picture more clearly, consider a command central aggregator, which will help you organize all your finances into one illustration and stay on top of how much each is worth.
Make Sense of Monthly Spending
A lot of people who start budgeting simply write down their expenses and call it a day. The goal of a monthly budget isn’t to just monitor how much you spend – it’s designed to help you make adjustments and become more profitable.
Your monthly budget is a powerful tool that can help you cut unnecessary purchases, make better choices with your money and learn to spend productively. A single tool that allows you to view all of the money coming in and out of your account will make a world of difference.
Consider your personal checkings account and credit cards. We all know that credit cards aren’t free money, but that doesn’t stop many of us from using them to buy things we don’t need or spend well beyond our means.
You may be surprised to find that your daily coffee habit or the meals you buy at work cost a lot more than you think. You could save literal thoughts by monitoring your monthly budget and cutting back on things you don’t need right now.
Of course, we all need some leeway, so instead of expecting yourself to never spend a spare dollar again, allocate a specific amount for entertainment and non-essentials. Don’t allow yourself to go over that limit.
How to Track Your Budget Easily
Using online tools to manage your finances will make budgeting a lot more rewarding and manageable. These are some of our favorite choices. All of these applications prevent data visually and provide a number of tools and features that enable intuitive spending.
Personal Capital is a visual-based system that displays your loan status, investments and personal checking accounts all in one place. Information is updated in real-time, so you’ll always know how much you have available and what you need to pay back. A networth figure is constantly visible in the upper left-hand corner, so you have a constant reminder to keep you inspired.
Quicken is a good choice for people who aren’t afraid of numbers. The interface is much more data-heavy than Personal Capital, but it’s also a powerful tool that gives you a lot more control over what you see. Financial management is more in-depth with Quicken, and you have the ability to create custom reports that cover any aspect of your budget. Depending on the features you want, the software ranges from $39.95 to $109.95.
The same makers of Quicken created Mint, a simple and free budget management system. The clean UI is easy to navigate, so it’s a good option for people who aren’t working with massive budgets. If you’re just starting out with personal financing, Mint is a good way to familiarize yourself with investment portfolio management and project-based spending.
You Need a Budget costs $50 and gives users an added dose of accountability You are responsible for inputting all your figures, so you have to stay up-to-date with all your accounts and payments. If you tend to let things go or find it difficult to stay on track with your finances, YNAB can help you become more mindful.
Using a personal financing tool, such as any of those mentioned above, can help you start to progress financially. While success doesn’t come overnight, a visual budget illustrates your progress every day, leaving you inspired and motivated to continue working toward greater security.
Learn how BMG Money can help you get ahead by loans made directly through your employer’s payroll system. Short term lending helps thousands of families get ahead, and make payments that count. Contact us today to get started!