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Money can rule your life. It can make you, break you, give you confidence, make you feel incompetent, make you hate it, and make you love it. But is money really that powerful or are you simply letting it have power over you? Whether you have an abundance of funds or you never seem to have enough, it is important that you are in control of your money instead of your money controlling you. This is the long-winded way of simply stating that you need to set a financial plan and stick to it, regardless of your income. Secure is not the person who has a lot of money, but the person who knows where their money is coming from, where it is going, and makes careful financial decisions. Here are 4 important things you should be doing with the money in your bank account. 1. Have Multiple Bank Accounts Contrary to popular belief, keeping all of your money in one bank account is counterproductive. If you have ever heard of the old-fashioned way of budgeting by using envelopes to divide your cash in your wallet, using different bank accounts is the same concept. It may be beneficial to not only open one free checking account in Milwaukee (or wherever your bank is), but to open two or three. For example, one checking account could be for daily expenses, like groceries, prescriptions, and other necessities. Another could be used for recreation and fun activities, like eating out and sporting events. Another checking account could be used for vehicle expenses, such as gas and car payments. At the beginning of each month (or whenever your schedule allows), divide your finances out among your checking accounts, and this is your set budget for the month. Do not forget to determine which checking account that bills and other payments will be taken from each month. 2. Save Regularly When you receive each paycheck, save a percentage of your income. If you use direct deposit, have your employer divide a set percentage of your paycheck and deposit it into your savings account. With the right program, this should be very easy for your employer to do and is a common way for people to build a savings without lifting a finger. Never glance sideways at your savings account. As it builds, treat it as if it doesn't exist until you need it for an emergency or for the specific expense that you were saving for, such as college. Avoid temptations to draw from it for trivial and non-emergency expenses. 3. Record Your Spending There are dozens of smartphone apps and computer programs designed to help you easily record your spending by the week and/or month. Utilize these tools or create your own spreadsheet to do so. Find what works for you and record every penny you spend. Doing this will help you to see exactly where your finances are going. You may be surprised at how much money you spend on certain things, such as eating out or clothes. This will help you know where to cut costs so that you can budget more effectively. 4. Live Beneath Your Means Just because you have a hundred dollar bill in your pocket doesn't mean you need to find a way to spend it. Spend a portion of it and keep the rest. This is how you avoid living paycheck to paycheck. Stop finding ways to spend money just because you have it. Find other ways to entertain yourself than shopping. While mapping out your budget, pretend that your income is lower than it really is. This way, you will still have money left over in your free checking account in Milwaukee at the end of the pay period, which is when you will truly begin to feel at peace financially.
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