Take control of your finances

In personal finances, there are only two options, you can take control of your finances or your finances will take control of you. Money may be the root of all evil but it is also what makes the world go round. You need to guarantee that you can not only live today but that you have a secure future. The key to doing this is to learn to budget and to make your money work for you not against you.

It is hard to get control of your finances in today's economy. Many people are over-extended and have much more credit debt than a healthy budget can handle. Your situation is what it is and while you can't undo everything, you can make sure that there is a light at the end of the financial tunnel.

First, do an honest evaluation of your financial situation. What your income actually is, what you owe, what you own and where you want to be financially. Make a list of every outstanding bill that you have and the balance on the account.

While you are looking at the bills also take note of the rate you are paying for interest on these accounts. For some people, this will be an eye opener. If you haven't been paying attention, you may find that your interest rates have skyrocketed.

To create a budget, look at your income versus your expenses and see where you stand. You may find that you have no money left over or you may even make less than you need to pay in expenses. This is the most serious condition. You must find a way to get back into a positive situation quickly.

The first thing to do is lower your expenses. If you are a renter, this is one expense you may not be able to lower but you can opt for cheaper cable service or drop cable altogether and use a service such as Netflix, turn off all electric appliances when not in use, lower the temperature in your apartment in the winter and raise it in the summer.

All of these will help to lower your expenses. You might want to get rid of your landline phone if you have a cell phone and take a good look at what you are paying for your cell phone. Look at your car insurance and opt for a higher deductible. If you live in the city, consider selling your car and relying on public transportation. These are desperate times and they call for some desperate measures.

Look at the deductions on your pay stub. Are you using the federal government as a savings plan? It is time to stop that, you should break even at the end of the year and put that money on your high-interest credit cards. If one of your cards has a better interest rate, try moving the balance from a higher rate card to the lower rate card and stop using your credit cards. If you are renting a car, you need your credit card but for most things switch to a cash economy.

Depending on what your financial health is, your budget may look pretty grim. It may take months even years to get control back but you can do it. The object is to spend less than you make and to save money so that in case of a dire emergency or job loss you will be able to survive for at least six months without any income.

In order to get your financial house back in order, you may need to work extra hours or even an extra job. Will that be difficult? Yes,  it will, these days it can be hard to find an additional job. You may have to resort to extraordinary strategies but where there is a will, there is a way.

Making a budget that will work for you is going to be one of the hardest and most satisfying tasks you will ever tackle. There will be a lot of lessons learned along the way but at the end of the day, you will emerge financially sound and with a true appreciation for the role that money plays in your life. What are you waiting for, your financial future is in your hands?