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A STEP-BY-STEP GUIDE TO SOLVE YOUR MONEY PROBLEMS AND FINALLY LIVE DEBT FREE!
Money seems to be one of the things we worry about the most.
We never seem to have enough, and we always want to make more. But you should never forget that managing your money is one of the most important steps to live a debt-free life.
How much time do you actually spend managing your money every week?
And I don’t mean stressing about it, worrying about not having enough or wanting more. I am talking about understanding exactly where your money goes, how much you are spending, and own much you own.
Isn’t it odd that we spend so much time earning money and so little time learning more about it?
What would happen if you invested a bit more time understanding how to use money as a tool and make it work for you? Instead of working for money?
Do this:
1. Take control
Take 30 minutes a week to take control of your financial life: think about what you want to achieve with your money. Set savings goals, track your expenses and your net worth.
2. Calculate your income
It’s a pretty obvious step, but you need to make sure you know exactly how much you bring home, after all, deductions and contributions, like a 401(k).
If you are self-employed or run your own business, calculate how much you earned on average in the last three to six months.
3. Identify your goal
Do you want to save for the holiday of your dreams? Or repay your student loan? Identify your goal. It needs to be clear and achievable.
Clear and achievable goals
- Save $3,000 ($250 a month) in 12 months for a wonderful overseas holiday
- Repay a $60,000 student loan in 10 years ($6,000 a year, $500 a month – we are ignoring interest here for simplicity)
- Save 30% of my net income
Vague goals
- Save some money to go on holiday
- Repay my student loan as quickly as possible
- Save a bit of money every month
You can see how clear and achievable goals will put you in a much stronger position and become more manageable.
4. Make a budget
Creating a budget is really going to help you manage your finance!
- Calculate your fixed expenses (mortgage or rent, bills, car payment, insurance). These are all the expenses you can’t easily control or reduce.
- Calculate your variable expenses (groceries, travel costs, phone bills, cable, entertainment, clothes, holidays, and cappuccinos in the morning!). These are the expenses you can really reduce and better manage by finding good deals or cut them out altogether.
Analyze your spending in the past three to six months and set goals for your variable expenses. Determine how much your spending will be in each category and start tracking your expenses from now on. This will really help you to stay out of financial trouble.
You can use a simple excel spreadsheet, apps that connect to your bank account and help you categorize each transaction, like Mint or use Personal Capital, free software that allows you to manage your entire financial life in one place. You can track your net worth, create a budget, manage your investments, plan for retirement, and reach your goals faster!
CHECK OUT MY MONEY-SAVING CHALLENGE: SAVE $5,000 IN 52 WEEKS
5. Pay yourself first
Once you have identified your goal and know your expenses every month, set aside the money you need to reach your goal first! As soon as the paycheck is in, pay your loan, move your money to your investment account, or move it into a separate savings account and forget about it.
Then go on, live your life, and spend the rest!
6. Stick to your goals
What’s the point of spending time and effort making a plan if you don’t stick with it? Make sure you review your spending regularly, you adjust your budget, and you keep aiming at your goals!
If you have trouble sticking to your budget every month, analyze your spending again. You have to make sure your goals are real and achievable, or you will feel like you are failing every month. It’s about building habits, not about depriving yourself of everything you love.
Start with small steps and grow into it!
Ready to live a debt-free life?
Follow these simple steps to learn how to manage your money, stay on top of your finances, and make sure your financial future is in your hands!
These easy-to-follow tips will help you to become debt-free and stop worrying about money.
You’ll be one step closer to financial freedom in no time.
MORE THINGS TO READ TO HELP YOU BECOME DEBT FREE:
If you are interested in starting your own blog, have a look at my step-by-step guide! I will show you everything you need to do to start a successful money-making blog!
Check out all the best resources for your blog! I find all these resources so valuable, and I am sure they will help you as much as they helped me.
Sara says
I love what you said about how much time we spend earning money, yet we spend so little time learning about it! That was my experience for a long time.
Sara @ Gathering Dreams says
Yes, it was mine too! I think no one really teaches us how to manage our money, and we need to take it upon ourselves to learn as much as possible about how to make money work for us!
Michelle Lady says
Love your website and content! Thanks for sharing the information on blogging, I am in the middle of starting one now.
Sara @ Gathering Dreams says
Thank you so much, Michelle 🙂
Dyana says
Setting goals was a game changer for me. When I knew exactly what I wanted to accomplish I was able to make a plan and became a lot more intentional with my spending!
Sara @ Gathering Dreams says
Completely! Knowing what you are saving for makes a massive difference!
Fredy meijer says
I am from Indonesia, I do need this, could you please guide me until success? There is a lot of things that I want to share, thank you, Ma’am.
I want to start it as soon as possible, please…
Sara @ Gathering Dreams says
Hey Fredy,
Is there anything specific you need help with? You can start a blog from anywhere. If you want to know anything specific let me know! 🙂
Jonnie says
Love your website! I was wondering if you could tell me where you make your pins specifically the ones with the bright backgrounds and the young women at the bottom. Are those stock photos and how do you get them to appear in the background?
Sara @ Gathering Dreams says
Hi Jonnie,
I use stock photos from websites like Adobe Stock or Deposit Photos. I then extend the background to create a longer image for Pinterest. You can use software like Canva or Photoshop to do that. I hope this helps! 🙂
John Mulindi says
Paying yourself first, is one that stands out for me, I think most people overlook it, by trying to settle bills before they save what is “left” and many fail because nothing is left behind but if you pay yourself first you will always find ways to pay your bills even if there isn’t money left for it. Great post.
Sara @ Gathering Dreams says
I completely agree, John! Thanks for stopping by 🙂