You know who needs to know more about their money? Everybody. That’s right, it’s time to start #adulting and managing your finances like a pro. But how do you even get started?
Isn’t it good enough to know you have money in your account every time you need to pick up the check?
Not if you want to plan for your future. It’s time to discuss ways you can start managing your money better. I’ve compiled a few tips to get you thinking about your finances and why it’s a good idea to always want to know more.
Check your account balances.
Because no one will check it for you.
This may seem like an obvious one, but knowing how much you have in the bank at all times can keep those pesky overdraft fees far from ever touching your money. Have you ever been so broke you feared looking at your account balances because you don’t want to see how much money you don’t have?
I’ve been there, and I’ve paid exactly two overdraft fees because of this fear. Never again. Don’t let this happen to you, check your balances every. damn. day.
Know how much you owe and when it is owed.
Because those late fees add up.
Many years ago before I was the responsible adult I should be today (hint: not so much), I was out getting sushi with a friend. We had just finished and the server brought us our checks. I confidently plunked down my Discover card.
The server came back with my card and told me it was declined. Oh thank god my friend had run to the bathroom, I could avoid this embarrassment. I knew I hadn’t paid my bill in awhile, but I thought they could extend me a lil credit (see what I did there?). So I grabbed my Visa credit card and gave that to the server. Again he came back right away letting me know that my second card had also been declined. At this point I was feeling a bit of shame and saw my friend returning from the bathroom. I gave him my debit card, knowing I had exactly $84 in my account. He ran it successfully and I tipped him well so he didn’t think I was broke.
If I had known my payments were so far behind to Discover and if I had known that I had exceeded my limit on my Visa card, I probably would have cancelled that sushi lunch with my friend.
Avoid this embarrassing scenario by knowing your due dates.
If you don’t keep track of how much you owe you are more likely to keep racking up debt. When you think about your debt is it this ominous feeling of dread? Then you quickly dismiss those thoughts because you don’t want to think about it? Have you sat down and added up the total of how much you owe? If not, it’s time to start.
Knowing your total debt is the first step to paying it off and keeping it from growing. If before every lunch you remind yourself you’re already on the hook for all those past lunches, you may consider a cheaper or free alternative. A pot luck get-together at your place sounds a lot better than paying interest on all those lunches for the next ten years.
Keep in mind every credit card company out there makes money off of you every time you pay your bill late. If you don’t know your payment due date you are more likely to miss a payment. This will lead to costly late fees and you will pay interest on those fees, too.
Plug your due dates into your calendars on your phone, then set as many reminders and alerts as it takes to get that date carved into your memory. Better yet, set up autopay through their website and never have to pay a late fee again.
And if you simply cannot pay your bill, call the company as soon as you know you cannot pay. Most credit card companies will waive a late fee or reduce a late fee if you call to set up a later payment date.
Learn your monthly expenses.
Because you can’t improve your situation if you don’t know what it is.
Sure some expenses are variable, like your utilities and groceries. But you know every month you are going to owe rent, internet/cable, cellphone, car insurance, etc. Take a minute to write down each of your expenses to see how much you are spending. Better yet, start an excel file you can continually update. Then compare that to your income per month.
If you see a negative number, its time to start drastic cost saving measures. If you see some wiggle room, then it’s time to start thinking about more aggressively paying down your debt.
These are the tips I used 15 years ago to go from $6,000 worth of credit card debt and no savings to where I am today. I have a lot of goals for my money this year and with these first steps, you can start setting your financial goals, too. Leave me a comment below letting me know how you started managing your own finances and the achievements you’ve made along the way.