# 1 set goals
âHaving goals to achieve will help you focus and stay motivated to limit your spending and protect yourself from the unpredictable,â says Adrienne. âStart by identifying broad, non-financial goals related to your personal priorities, such as security and freedom. Then reduce them based on financial results like saving for a wedding, buying a car, or saving for your first home.
# 2 embrace the budget
âThe first step to achieving your goals is to set your budget. To do this, you need to identify your monthly expenses that you cannot live without, such as rent or mortgage payments, bills, groceries and transportation costs, âsays Adrienne. âThen you can look at how much money is left that could be used for savings and non-essential expenses such as dinners or take-out, gym memberships, beauty services, and retail purchases. “
# 3 replace spreadsheets with apps
âThere are many smart bank accounts and apps that can help you take control of your finances with much greater accuracy than having to rely on manually updating budget spreadsheets. These apps retrospectively analyze your spending, to help you understand where your money is going, giving you better insight into your spending.
“By recognizing where your money is going each month, you can then figure out where you might be spending too much, then make a few small lifestyle adjustments and start building your wealth.”
# 4 Divide your accounts
âOnce you understand your critical spending, it’s time to put in place a way to better control your money and keep your spending under control. The best way to do this is to divide your accounts into three parts.
# 1 Pay. âThis is the account that covers all of your critical invoices. It is recommended that you configure all of your income to pay into this account, making sure you always have the money to cover vital expenses. This includes your salary and / or pension payments. Always leave a buffer in this account to cover unforeseen costs or unusually high bills.
# 2 Save. âThe next step is to direct some of your remaining income to a savings account (preferably a high interest account). Doing this first ensures that you put money aside to meet your financial goals or have a safety net for unforeseen costs.
# 3 spend. âThis account is where your play money resides. Once you’ve allocated funds to Pay and Save, the rest can be used as you see fit. But remember, once it’s gone, it’s gone.
# 5 Focus on savings
âSaving is key to making sure you live the lifestyle you want. Not only can this act as a safety net, but it’s also the account that will pay for your next vacation, get you that new home, or buy that new car you’ve had your eye on.
âImmediately transfer money to your savings account as soon as you get paid. This direct transfer can range from $ 500 / month to $ 20 / month depending on your personal financial situation. The key to making that money work as hard as possible is to find a high interest savings account and let the compound interest work its magic.
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