3 Things to do to get Your Finances in Order

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Here are three things to do to get your finances in order:

1. Make a budget.
2. Plan to save.
3. Set up an emergency fund.

1. Make a budget

Making a budget allows you to balance income and expenses. Most people are stressed by money. A budget is an excellent way to reduce money-related anxiety. It allows you to see how much money you need to live as you would like. Do you live beyond your means or do you have some money left each month? By making a budget, you will take control of your finances. You will know whether you can put money aside to fund your projects and, if applicable, how much you can save.

2. Plan to save

To take control of your finances, plan to save in your budget! Even if it is just a small amount, it is important to learn to pay yourself first, automatically. You program it once and it is done for a long time. Therefore, you are saving without thinking about it and having to calculate what amount you need to put aside from each pay. You can increase the amount of your savings when your wages or income increase unexpectedly, such as a tax refund or year-end bonus.

What target should you aim for to save? If you can afford it, try to save 10% of your gross salary. Therefore, if you earn a gross salary of $2000 per month, you end up saving $200.

Those savings are your freedom of action. That money will allow you to make your dreams or projects come true or simply leave a job that you no longer like or refuse a contract that does not interest you. In short, your savings allow you to fulfill your ambitions for your future.

The important thing is to make saving a habit. Therefore, if you are unable to put 10% of your salary aside, start with a smaller amount and increase it over time. You just have to start somewhere.

3. Set up an emergency fund

Once your savings have been programmed, set up an emergency fund to face unforeseen events without getting into debt. It is the cushion that allows you to sleep soundly! How can you do so? Starting with your automatic savings, you are saving slowly but surely, the equivalent of at least three months of your net salary. It might seem a lot but go at your own pace. The important thing is to put the money of your emergency fund in a place where you can withdraw it quickly, like in a savings account.

Unexpected expenses are part of life. No one likes to be indebted for an emergency visit at the dentist's or for car repairs. Ideally, you set up your emergency fund before putting money aside for your projects.