We’ve all heard the phrase “finance is the key to success”. And while it’s important to focus on your finances, planning ahead and getting your financial house in order can be easier said than done.
In fact, according to a report by GlobalWebIndex, the average American spends about 20–25% of their budget each year on lifestyle expenses.
That’s why we put together this list of 10 challenges that will help you think about how you’re spending your money and help you get more control over your finances.
1. Create a household budget.
The first step to getting your finances in order is creating a household budget. Start by figuring out how much money you’re bringing in and how much you spend every month on expenses for things like rent, food, utilities, and more.
Once you’ve figured out your total income, subtract all of your expenses from that amount. This number should represent the amount of cash that’s left over each month.
Divide the leftover cash by 12 to calculate how much money you have left each month on average to put into savings and investing accounts such as your 401k or IRA account (there are many great places for young people to invest their money).
