Money, money, money, it’s all we seem to talk about on a consistent basis. Stocks are going up, down, the economy is good, bad, job markets, etc. all of this is important, but stripping it down to the most basic level is understanding money and finances on an individual basis. Namely, how well you’re handling your money.

Before you can start thinking about the macroeconomics of a growth economy, or the reversal trends of a candlestick on a stock chart, you have to start thinking about how your money is doing. If you’re struggling to understand your finances, here are some tips on managing them better.

Create a Budget

Any list about personal finances that doesn’t include this as the number one tip is just wrong. The best way to start focusing on your finances is to understand how to budget. Admittedly, it can take a while for some folks to grasp the concept of budgeting, but even using a personal budgeting app can simplify the process. You want to calculate your necessary expenses, like gas/transportation, food, housing, utilities, and make sure that those are always accounted for, then slowly build around it what you deem necessary, and maybe unnecessary.

Learn How to Calculate Taxes

In a more complicated task, taxes are an obstacle you’ll eventually learn to hurdle. Death and taxes are the two unavoidable aspects of our lives, so said Benjamin Franklin, and the face of the $100 bill couldn’t be more right. That just means you should consider downloading a tax app or research the many resources out there to help you understand taxes and their purpose. Taxes aren’t fun, but if you can figure them out, you’ll be able to incorporate them into your entire understanding of finances.

Invest Instead of Spending

This is a trickier subject as well. Many people focus on saving, but it’s not always the best strategy compared to investing. If you consider inflation as you being the sole owner of a chicken, the eggs you produce from that chicken are highly valuable because no one else has them, but as more people get chickens, the value drops because they’re more available. 

The same applies to the inflation of your dollar, so saving it will only drop as more money is put into circulation. Investing in assets that add value, rather than devalue because of inflation, is a good way to protect your value. Stocks can be tough, so focus on building up your savings first because they’ll be fine in the short term.

Keep Track of Purchases 

As an addendum to your budget needs, you’re going to have to start getting really frugal and tracking each purchase. It can be a pain, but luckily online and mobile banking makes it a lot easier to see what you’re spending money on. When you can accurately tell where your money is going, it makes it more visceral to see that maybe you’re eating out for lunch too often and to scale it back a bit.

Cancel Unnecessary Expenditures 

You probably have plenty of unused subscriptions linked to the credit card that is simply eating away at your money without you knowing, or worse, with you not caring. It’s not going to make you a millionaire overnight to cancel a subscription to a streaming service, but it’s better than money being siphoned out of your accounts without your consent or care. Pull the plug on them and that money can be reinvested into your budget.

Make a Long Term Plan

Circling back to the point about investing instead of spending, for the short term, you want to build up about 3-6 months’ worth of savings in case of emergency, job loss, etc. but overall, you want to start building a long term plan. Creating a long-term goal helps psychologically prepare you for cutting back on expenses and helps you focus on more tangible goals. It requires a lot of patience, but it’ll work out in your favor in the end.

Pay Off Debts

Finishing it off strong is a crucial part of being a more financially savvy individual – paying off debts. Before you consider buying or financing a new car, taking a trip, investing, saving, or doing literally anything with your money, you should be paying off any and all debt. You want to start with the smaller, more manageable debts to pay them off fast, then work on chipping away at bigger ones.

Finances aren’t always easy, and it’s definitely a touchy subject depending on who you talk to, but it’s never too late to manage yours better and these tips will surely help you understand your duties in that process.