If you’re like most people, then you probably wish you were better with money. You might not be saving as much as you want or spending money on things you don’t really want. Everybody makes mistakes with money from time to time, but if you’re constantly kicking yourself for how you handle your finances, then it’s probably time for a change.

Getting your finances together isn’t necessarily easy, but it will make your life better and easier. Here are some steps you can take to set yourself up for a better financial future.

Why Care About Personal Finance?

Money management is a skill, just like anything else. If you don’t learn to manage your finances, it will eventually have consequences like expensive debt or a bad credit score that could prevent you from buying a car or house, or even just renting an apartment.

But personal finance is about more than just preventing bad things from happening. It’s about thriving and making sure you have enough money to keep you safe and secure no matter what happens. It’s about managing and growing your wealth in order to improve your life.

You have complete control over how you spend your money. Yes, you need to have food to eat and some kind of roof over your head. But beyond that, you’re in control. If you learn to manage your personal finances, you’ll have less stress and feel better about yourself.

Balance Investing with Spending 

If you want to grow your wealth and feel more secure, it’s a good idea to invest at least some of your money. Banks make investments, so why shouldn’t you? If money is just sitting in your bank account, it will be tempting to just spend it.

You do need to have some money set aside for a nest egg. But once you’ve reached a certain threshold, it can make more sense to talk with an investment professional to discuss your options. A diverse portfolio is key for creating a solid financial foundation.

It’s also a good idea to balance investing and spending. You shouldn’t deprive yourself by putting all of your extra income into investments. Set some money aside for the things you want. Whether it’s a vacation, a new pair of shoes, or a video game, things that we buy make our lives more fun!

Balancing your investing and spending is basically thinking about both the future AND the present.

Analyze Your Finances and Budgets 

Before you can improve your personal finances, you need to analyze your current financial situation and figure out where your money is going. This will give you a baseline and allow you to set goals for the future.

Start by looking at what you’re bringing in every month after taxes. That’s what you’ve got to work with. Then, take the last few months of bank statements and credit card bills to get a brutally honest picture of where you’re money’s going.

See how you’re allocating everything. Are there categories you’d like to spend less on?

Create a Budget and Financial Plan 

Next, you should create a budget you’ll actually stick to. Take the amount you make every month and subtract the essentials: housing, food budget, utilities, insurance, transportation, etc. That way, you’ll know how much you have left over.

Then, think about your larger financial goals. Would you like to buy a house? Get some high-quality furniture? Save up for the vacation of a lifetime? Set some money aside for these goals. Also, make sure you’re reserving some money for saving and retirement.

Finally, you should set some limits for yourself on other types of spending. Prioritize your normal spending and make sure you’re being realistic about what you’ll actually spend. If you want to, you can even use a budgeting app to keep you on track. It’s all too easy to whip out the credit card.

Establish & Contribute to Retirement Accounts

Many young people wait too long to contribute to their retirement accounts. Unfortunately, starting too late will result in far less time for your money to grow. Regardless of your age, you should start contributing to a 401(k) or IRA as soon as you possibly can. Most employers offer 401(k) plans, and some even provide contribution matching for a certain percentage. Even if you can’t contribute the maximum amount, every little bit helps. Don’t put this off—your future self will thank you.