It’s a new day, a new month, and a new year! & This time around we are really doing things differently. The First thing we are handling better is our finances! Now I’ll be the first one to say my money habits are horrible and that’s to put it lightly. I very much have an I see it I want I buy it mindset. Don’t believe ask Gucci!
My mama has said to me numerous times aren’t you tired of spending money, or my dad will say you just buy unnecessary stuff. Well, the issue is I can find a way to justify everything until the end of the month when I have to pay American Express and Capital One.
Honestly, I’m not tired of spending money. What I’m tired of is paying the same credit card bills over and over and spending my money on things that don’t appreciate. So, this year I’m working and praying to be a better steward of my money and have financial freedom.
Now I’m telling y’all all my business because I don’t want to do this alone. We can all jump on the train and do better with our finances. This blog is episode one and I’ll drop a few tips and a monthly budget. Each episode will come with financial literacy and an updated budget sheet.
The basics to get us started
Improve your money mindset
Check out this book for help improving your mindset.
1. Track your spending (Most banks have a feature through their mobile banking app that will help with this)
Check your accounts
Categorize your expenses (needs wants, savings, and debt repayment)
Build your budget
Identify room for change
2. Create a budget and stick to it
Creating a budget is a great second step in developing healthier money habits and learning how to get the most from your money. According to the Consumer Financial Protection Bureau (CFPB), “budgeting helps ensure that you’ll have enough money for the things you need and the things you want, while still building your savings for future goals.” You could start by using a budgeting worksheet and following general steps like these: Add up your monthly income. This includes your salary at your job plus other sources of income like bonuses, tax refunds, or income from side work.
3. Try the 10-10-30-50 rule
10% you tithe
10% you save
30% cash in your pocket
4. Pay off your debt (try the snowball method)
Snowball Method: this method focuses on paying off your smallest debts first. You still make the minimum payments on all of your debts. At the same time, you use any extra money to pay off your smallest balance. Then you use the money you’ve freed up to pay off your next-smallest balance and so on. Now with everything, there is a catch-22, This could mean debts with higher interest rates might wind up taking longer to pay off. And that could cost you more in the long run.
Now I know you don’t want to hear this, but you don’t need to make more money you need to spend less. Master your money before it masters you. Remember we will not be HENRY’s (high earners not rich yet) this year.