5 tips that will help you to stay in control of your finances no matter what

The world of personal finances can be overwhelming, especially when you don't have a lot of cash to spare. It can be hard to feel in control of your finances when you have so little control over what bills you have to pay and what is going on with the global economy.

In this article, you are going to find a 5 step guide that will put you in a position to cope with whatever the world of finance throws your way. And it will even help you to get into a position where you can start to pay off your debts.

Step 1 – Be aware of your finances

You can't improve your financial situation until you know what it is. So, the first step is to take a deep look at what is going on with your finances.

You should know how much you are getting paid, how much you are paying in bills, how much you are spending on food, and on other outgoings. You should be aware of which ones of these are essential and which payments aren't.

You should also take a look at any debts you have. What your minimum payments are, and how long it will take you to pay them off.

By the end of this process, you should know exactly what is going into your account and what is going out. You should have a good idea of how this will leave your balance at the end of each month.

Step 2 – Identify troubling spending habits

If step 1 has made you realize that you are spending more than you are earning, then there are some things you can do about that.

Lots of ‘financial experts' will tell you that if you're not earning enough then you should get a new job. We understand that this is not reasonable for most people. So, here is some alternative advice.

You may have to sacrifice some things to keep your finances balanced until you have paid off some of your debts. For example, you could walk or bike to work instead of driving. You could give up your Netflix subscription for a couple of months.

Price comparison sites are a great resource for saving money on your bills. Make the most of them. If you gamble, you could give that up to save money.

Step 3 – Set up a budget

Think about your long-term financial goals. Do you need to save up for a new car? Would you like to save up to go on holiday? How soon can you be debt-free? Do you have an emergency fund?

Take your total income and minus all your essential payments from it. That will be the amount of money you have left in your budget for the month. Set yourself limits for what you can spend this on and decide how much of it you are going to set aside each month for your savings.

Having gone through the first two steps, this should be very simple.

You may need to take out a small loan from somewhere like http://creditninja.com to help you pay everything you need to in this month. You want to go into the first month of your budget with no other due payments. This will make life easier for you in the long run.

Step 4 – Open savings accounts for every goal

If you have multiple savings goals then you should have multiple savings accounts.

Why?

Because having separate pots of money means that you're not tempted to dip into one to pay for something else. Or at least, it is a lot harder to do so on a whim. If you want to make it even harder for yourself you can set up a 2-step verification process to access the money.

Step 5 – Start paying off your debts

Here is our favorite debt paying technique:

Make a list of your debts, starting with your smallest one at the top and ending with the largest one.

Every month make your minimum payments for each debt.

When you have paid off your smallest debt, start putting the minimum payments for that into the next debt on the list.

For example, if you were paying $6 into the smallest debt and $20 into the second smallest debt. When you pay off the first debt, start paying $26 into the second smallest debt.

When you have finished paying off the second smallest debt, move the amount you were paying into that one into the third smallest debt.

For example, if you were paying $20 on their third smallest debt, roll the $26 from debt one and two into the third one. So now you will be paying $46 into that debt.

You will be able to pay off larger and larger chunks of your debt without having to pay more than you did on the first day you started.