Get Good With Money

Get Good With Money is a guide to creating a healthy relationship with money and achieving financial security.

Everything runs on a budget. From your local shop to corporations, they all use financial estimates. So why shouldn’t you? Creating one will make you less likely to overspend on impulsive purchases. This is a great first step towards your financial success.

Don’t think about your budget as something restrictive, but rather the opposite. Setting a budget and managing to keep some extra cash aside is a future payment to yourself that you can use to go on vacation or buy something you’ve never had the money for.

You want to start by making a list with all your income sources and all your expenses. Just like in accounting, try to be as accurate as possible with the ‘’money in’’ and ‘’money out’’ sections. Then, set a percentage of your income that you will put aside each month.

You may find it easier to use labels. For example, try tagging bills as B, utility bills as UB, and non-contractual costs like groceries as C. If you find that the first two are the biggest expenses for you, you’re not earning enough. But if the latter costs the most, you’re an overspender.

Aliche suggests setting up two checking accounts – for cash expenses and bills and two savings accounts – for emergencies and long-term goals. But, of course, the best thing you can do with these is to automate your payments to avoid temptation and errors.

Debts are a burden most of us carry around like an anchor. Mortgages, student loans, car loans, and any other liabilities are all standing in your way to achieving financial freedom. Luckily, there is a way out of this rut. It starts with changing your mentality on debts.

Create an accurate list of what you owe. Make sure to include interest rates. You can start by paying off debts from smallest to largest, also known as the snowball method, or getting rid of the one with the highest interest rate using the avalanche method.

After choosing your preferred way of operating, it’s time to take care of your credit score. Debt is generally a bad thing, but it can get you places if you use it wisely. For example, good credit can provide you with better interest rates and huge savings on purchases.

Make it a financial priority to improve your credit score by always paying on time and making monthly contributions. In addition, aim for a credit utilization of a maximum of 30% to build a credit history without burdening you with huge liabilities to fulfill.