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Is your financial situation causing you stress? You might be worried about your monthly rent or the amount of debt you owe. Avoid a financial crisis by following these simple rules:

Step 1: Set Goals

Write down goals for your money in the future. Ask yourself: what do you want your finances to look like in the future? Sort your goals in terms of priority so that you know what’s most important to you.

Step 2: Track Your Income

Figure out where your money is going. You probably know how much you’re earning, but do you also know where that money is going? Track what you spend. For a week or so, spend your money as you normally would, but write down what you spend after each transaction so that you know exactly where your money is going.

Step 3: Separate Your Needs and Wants

Ask yourself: do I really need what I’m buying? Will spending this money get me closer to my future goals or further away? Is it necessary? Having set priorities makes these decisions much easier to make.

Step 4: Put Your Plan into Action

Before your monthly paycheck, decide what you’re going to spend it on, what your priorities are, and why they are there. Ask yourself: do I have enough money to take care of my rent and other household expenditure? Have I put away money for emergencies and unforeseen circumstances? This will help you avoid going further into debt and you won’t have to rely on credit to pay it off.

Step 5: Seasonal Expenses

Expenses like money for new clothes, new shoes, or books are bound to bother you in the near future. These expenses slowly eat away your money if you don’t pay much attention. Keep money aside to pay for these expenses when the need arises.

Step 6: Plan Ahead

It may take some time to get used to a budget plan. You might not have used a budget plan before, so give yourself some time to adjust. Plan to take care of unexpected expenses that may arise in the near future and plan accordingly.

Step 7: Budgeting Tools

Use a budgeting tool that you understand. You can even start with a pen and pencil if you have nothing else available. Your first budget should be easy to use and understand; you don’t want to overwhelm yourself at the start. It’s best to start your first budget with just a pencil or pen and move onto an electronic format if you find that more comfortable.

Step 8: Have Support

Have support when you’re starting out. Attempting to make a significant change in your life can be intimidating and unnerving, so have a good friend or family member listen to what you want to do in the future and how you plan to achieve it. Having someone else’s opinion can really help when you are geared up for changes in your daily life.