Whether you are looking to buy your first home, undertake your dream renovation, pay down your mortgage faster, or save up for that trip you've been dying to go on, managing debt is an important part of the puzzle. Sometimes getting your personal finances in order can be a tricky undertaking, but it can mean more freedom - so let's go over a few steps to get you started:
Take stock: first, let's get everything into perspective. Make a simple spreadsheet of your typical monthly expenses and income. This will quickly show you how much you can save or where you need to cut back (maybe you didn't have enough money for those new boots).
The emergency fund: set aside $1,000 in a savings account - this will be your "just in case", because we know life isn't always perfect.
Start small: list your debts from smallest to largest. Start by paying off your smaller ones first and work your way up.
Cut back: some expenses just aren't needed. Take a moment to cut back on some guilty pleasures and use that money wisely (getting rid of that double-mocha Starbucks latte each day can save you $1,428 each year, not to mention thousands of calories).
Save: now that you've got momentum, take 3 to 6 months of non-necessary expenses and put them into your savings account. This will add some security and a nice nest egg.
Keep track: being able to keep track of your debts, expenses and income should now be second nature. Keep using your spreadsheet moving forward and start allocating money towards the things you want, while growing your savings.
The wise next step: remember why you started this? Now that you're saving money - start using it wisely. Are you ready to find your dream home, redo your kitchen or pay off your mortgage quicker? You should be in a place where you know exactly what you can afford.