Take Control of Your Finances by Following These Three Steps

Posted October 9, 2013 by in Lifestyle
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We attended LearnVest Live last week and learned a lot of valuable lessons and shocking realities about finances. Here are some of the statistics that not only blew our minds, but seriously made us think:

  • 61% of Americans live paycheck to paycheck.
  • 30% of Americans who make $100,000 or more a year are in this position.

What?!

Most people think their money woes will go away when they make more money, but that rarely happens. Simply buying a house you really can’t afford and living above your means can easily make you a part of these statistics.

After listening to Alexa von Tobel, the CEO of LearnVest speak about how to take control and not be a statistic, we learned so much and just needed to share !

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Step 1: Organize

Track everything and run your finances like you run your social life. Create a separate email account just for your bills and set up automatic calendar alerts for your money to-dos, so you never miss a deadline.

You also need to know important dates:

  • Your Bills: Both monthly and annual.
  • Your Savings: Make yourself a bill.
  • Your Taxes: Prep and payment schedule, if applicable.
  • Your Credit Score: Check monthly. Check for free and without being penalized at CreditKarma.com.

Step 2: Focus

Know your numbers:

  • Income
  • Expenses
  • Credit Score

Step 3: Know the 50/20/30 Method

Following this formula will help you figure out how much money you should be spending each month and on what, based on your income.

Essentials (50%) – Rent or mortgages, utilities, transportation to and from work, and groceries.

Future (20%) – Debt repayment, emergency savings and retirement funds.

Choices (30%) – The fun stuff: eating out, travel, shopping, gym, gifts etc…

Following these three steps will help get your finances in order. Think you need more help? Consider purchasing a financial plan from LearnVest!