September is Self-Improvement Month and if your personal finances are in a mess, then there’s no better time than now to get your financial house in order. These five easy steps will help you improve your personal financial situation, both in the short-term and for the long run.

 

1. Make a list and check it twice

Knowledge is power, even when it comes to your personal financial situation. Find a notebook or create a new document on your computer and make a list of every single debt you have. Make sure you include student loans, auto loans, credit cards, money owed to friends or family and any outstanding debt that you may have. Once you have a complete picture of your financial situation, even if it is worse than you thought, you can make a budget, set goals and ultimately improve your financial situation.

 

2. Make a budget

Now that you know what you owe, it is time to sit down and make a budget. A budget is a living document and it changes, sometimes month-to-month and sometimes paycheck-to-paycheck. If you’ve never made a budget before, don’t fret; there are a plethora of free resources available on the web. Check out this great article from Nolo.com, Budgeting: How to Make a Budget, for a step-by-step tutorial.

 

3. Track your spending

After creating your budget, you should start to track your monthly spending. This is the only way to know if your budget numbers are realistic. For example, you budget $400 for food and groceries for a month but after tracking your spending you realize that this number is closer to $600. You either have to make room for a $600 food budget or trim your food spending by $200. I’ve always found that tracking my spending can be a real eye-opening experience.

 

4. Set savings goals

Setting an achievable savings goal is an important part of improving your personal financial situation. Even in tight times, committing to saving $5 every week can make you feel like you’re in control of your personal finances instead of feeling controlled by them.

 

5. Personal finance education

The more you know about personal finance, the better. Grab a personal finance book from the local library, start reading finance web sites and subscribe to a few free podcasts. As I said previously, knowledge is power and if you are constantly expanding your personal finance knowledge, you will continue to have more control over your finances.

 

What’s your favorite piece of personal finance advice?

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