Knowing How To Manage Your Money Matters

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Spongebob Kraft Macaroni & Cheese Box

Thanks to financial planning, Bridget doesn’t have to eat Kraft dinners … but she does! (Is this a Canadian thing, BNL?)

Since it’s National Financial Literacy Month, I thought it’d be a good time to talk about getting your finances in order.

When I first started getting my finances in order, I was intimidated by the amount of information out there and confused about how to get started. I had a student loan debt that was more than I had ever earned in a single year, and I had no idea where to begin when it came to saving money.

I was still opting for Kraft dinners three nights per week (out of both choice and financial necessity). How could I be expected to start putting money away for retirement?

***

No One Will Ever Care About Your Money As Much As You Do

I quickly realized my paychecks weren’t going to save themselves. I knew that if I wanted to achieve any semblance of financial security, I’d have to figure it out. Turns out, money isn’t as complicated as it appears at first glance: You need to know how much you have and how much you owe, and go from there.

You Don’t Get Rich By Accident

Once you’ve taken stock of your finances, you can start to make the appropriate adjustments. You should always make a dedicated effort to maximize how much you earn, and then put an equal amount of effort into making sure you always have something to show for it.

While winning the lottery would certainly be nice, it shouldn’t be your get-rich plan. Instead, focus on securing full-time employment with the highest salary you can negotiate, paying down all your consumer and student debts, and saving a little bit each month for the future.

After I finished school, my first goal was finding a job that paid over $45,000 so I could start wiping out my debt and cut down my mac and cheese consumption to twice per week or less. Two years later, I’ve paid off more than $17,000 of my student loans and am dining from a considerably classier menu.

Money Will Affect Every Area Of Your Life

Whether you want it to or not, money will have a profound effect on your lifestyle—it might even be the limiting factor. From where you live to what car you drive (and even what you eat), the first determinant is what you can afford.

If you’re not materialistic and could care less about status spending, remember that money buys more than things: it buys experiences. Raising a family, traveling the world, and retiring early all hinge on the number in your bank account. More money will always mean more choices. You might be able to get away with living outside your means for a while, but rest assured, your spending catches up with you sooner or later.

After managing my finances for the past few years, I’m finally starting to see the fruits of my labors. Not only am I nearly debt free, but I’ve also saved a five-figure sum for retirement, built a small stock portfolio, and enjoyed some splurges like two trips to Europe in the past 2 years.

I know that I still have years of working and saving ahead of me, but I think I’ve almost gotten the hang of this personal finance thing.

What has getting your finances in order allowed you to achieve? Let us know in the comments.

(Photo: JeepersMedia)

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