2700: 10 Ways to Take Control of Your Finances by Kalen Bruce of Money Mini Blog on Financial Independence

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[00:00:40] This is Optimal Finance Daily, Episode 2700, 10 Ways to Take Control of Your Finances

[00:00:46] by Kaelin Bruce of MoneyMiniBlog.com. And I'm your host and personal finance enthusiast,

[00:00:52] Diania Merriam. Now let's get right to today's post as we optimize your life.

[00:01:01] 10 Ways to Take Control of Your Finances by Kaelin Bruce of MoneyMiniBlog.com

[00:01:07] Finance is all about managing all the activities that include money,

[00:01:11] but bad money management can give you many life lessons. It's necessary to keep all

[00:01:16] records of your financial activities. Being in control of your finances helps you make valuable

[00:01:22] decisions regarding your finances and it helps you spend less than you earn. Regardless of level

[00:01:27] or experience, we are all capable of managing our personal or family finances. A person drowning

[00:01:34] in debt, unemployed or both is going to have a hard time controlling their finances. Tracking

[00:01:39] your money can be fun. Once you get to know about your income and expenses thoroughly,

[00:01:44] you'll feel much more assured while spending your money. Never make money your stress button,

[00:01:50] it can actually be your happy button. If you want to have your financials in order, you need to

[00:01:54] have a solid money management plan which will become the light at the end of the tunnel if

[00:01:59] you're struggling right now. Using these ways to control your finances will lead you to a

[00:02:04] peaceful life. Number one, understand your cash flow. When you understand your income

[00:02:10] and expenses, you can start spending wisely. Many people don't keep track of their cash flow.

[00:02:16] That's a problem. Why? Because understanding your cash flow helps you save more money.

[00:02:22] It's only possible when you spend less and earn more. There are three possible options to

[00:02:26] manage a cash flow shortage. Number one, earn more. Number two, spend less. And number three,

[00:02:33] combine the two. Number two, set goals. There should be a motive to control your finances.

[00:02:40] The motive can be some kind of need or want, a dream of some sort that you wish to come true one day.

[00:02:46] Many people have goals. Maybe it's your kid's wish for a Disneyland trip.

[00:02:50] It could be diamond jewelry for your wife or a Rolex for your husband.

[00:02:54] You've simply got to set some financial goals. Number three, cut down unnecessary expenses.

[00:03:01] It all comes down to the basics. To reach the goals we discussed, you've got to give up some things.

[00:03:06] Big dreams ask for big sacrifices. Let's say you want to buy your own house in the middle of a big

[00:03:11] city. Cut expenses to get to your goal. Traveling in metros and locals, cutting down your travel

[00:03:17] and entertainment expenses, and saving on fuel and electricity are some ways to reduce

[00:03:22] your unnecessary costs. Instead of going out to eat, treat yourself with delicacies at home.

[00:03:28] Number four, start investing. It's time that you start channeling those savings into investments.

[00:03:35] It might sound a bit overwhelming, but saving alone cannot pave your way to your dream.

[00:03:39] Investing in stocks, mutual funds and many other instruments will give you positive results.

[00:03:44] You just need to have some financial facts clear and be wise with your decisions.

[00:03:49] You'll need time and patience to get things right. Knowledge and patience are the

[00:03:53] keys to success. Number five, increase your income. As you already know the basics, in order to improve

[00:04:00] your finances, either you earn more or you spend less. Earning more could be the main ticket

[00:04:05] to your success. When you look to earn more money, you've got options. You can ask for a raise,

[00:04:10] do overtime, try getting a promotion, or consider switching to a higher paid job. Also, there

[00:04:15] are part-time jobs and jobs you can do sitting at home. Number six, calculate your net worth.

[00:04:22] Your net worth can be a useful tool in determining your economic status and your financial progress

[00:04:27] from year to year. First, list all your assets such as your savings, real estate, investment

[00:04:33] accounts, etc. And then list all your liabilities like your lines of credit, mortgage balance,

[00:04:38] credit card balances, etc. And if you are a business person, don't forget to make two lists,

[00:04:43] one for your personal finances and another for the money matters in your business.

[00:04:48] After that, subtract the total liabilities from your total assets which will give you the proper

[00:04:52] net worth of the year. When it comes to your financial health, you should use your net worth

[00:04:57] to track your progress from year to year. Number seven, find the best resources. Knowledge is

[00:05:04] your best resource but there are so many other resources out there to help. Check out our

[00:05:08] tools page to see what we mean. All you need to do is be well informed. Number eight,

[00:05:13] use a budgeting tool. Once you get familiar with the idea of personal financial planning,

[00:05:19] you should put all your knowledge into practice. First of all, put away your abacus or a casio

[00:05:24] calculator. Nowadays, many types of programs or apps help you keep track of your saving and

[00:05:29] spending. These apps will help you in managing and controlling your money safely in one place.

[00:05:35] Budgeting helps you in achieving your goals and lessens your chances of slipping into bad

[00:05:39] habits. Use all this information to make smarter decisions and achieve all your financial goals.

[00:05:46] Number nine, follow a debt plan. There are many ways to save your money and have control of your

[00:05:52] expenses but the first priority should be paying off all your outstanding debts if you have any.

[00:05:57] Once you pay off all your debts such as your car loans, student loans, credit cards, or any

[00:06:01] other personal loans, then you'll have much more room for investing and saving. The more

[00:06:06] time you wait to pay off your debt, the more interest you'll be paying. You should choose

[00:06:10] the best way to pay off your debt with which you get a higher chance of success.

[00:06:15] Number 10, save for your 60s. The 60s means the days after your retirement when you're 60 and

[00:06:22] older. The sooner you invest for your retirement days, the better life you'll get in your

[00:06:26] golden years but skimping on saving and investing now brings the potential for the

[00:06:31] hardest times of your life later. So there should be a targeted plan for savings.

[00:06:37] Every person has a right to dream. May it be big or small? To achieve those dreams,

[00:06:41] you need some money and the proper utilization of funds depends on how you control your finances.

[00:06:47] To grow your money, you need to make sound financial decisions which will take you a

[00:06:51] step closer to your dreams. You just listened to the post titled 10 ways to take control

[00:07:00] of your finances by Kaelin Bruce of moneymini blog.com and I'll be right back with my commentary.

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[00:08:58] When I think back on how I took control of my finances, it really started with building

[00:09:03] awareness. So for example, I knew that I had debt because I was paying my student loans and

[00:09:08] credit card bills. And I thought I was being responsible because I was paying all my bills

[00:09:12] on time. But I didn't realize how deeply I had dug myself into debt until I ran a credit report

[00:09:18] on myself. And by the way, if you haven't already done this, you are entitled to a free

[00:09:22] credit report from each of the three reporting agencies, which are Experian, Transunion and

[00:09:28] Equifax once per year. I got mine from annualcreditreport dot com, but beware of any website that

[00:09:36] tries to charge you for access to your free annual report. So once I looked at everything

[00:09:41] collectively and saw that I was in 30 grand of debt, I was in a much better position to do something

[00:09:47] about it. The other thing that really helped me was tracking all of my expenses and having a

[00:09:53] really clear understanding of how much money I could throw at my debt each month. This is the

[00:09:58] benefit of developing a budget. It helps you decide where your money will go versus

[00:10:03] wondering where it went. If you're looking for a digital tool to help you budget, check out the app

[00:10:08] you need a budget. And I also really love using personal capital to track my net worth. This is a

[00:10:14] free service that hooks up to all your accounts and continually monitors your assets and liabilities

[00:10:20] to calculate your net worth easily. And one last thing when it comes to priorities around

[00:10:25] debt repayment versus investing, the interest rate really matters here. Credit card debt

[00:10:31] with an interest rate over 10% should be handled urgently. But if the interest rate is less than

[00:10:36] 5%, you might consider paying down debt slower so that you can simultaneously invest in tax

[00:10:42] advantage retirement accounts. And that will do it for today. Have a great day and start to your

[00:10:48] week. Thank you for listening and I'll be back here tomorrow where your optimal life awaits.