Money Makeover

Are you tired of your financial situation and ready for a change? There’s no better time to start than right now.

We’ll show you how to avoid making hard-to-reach goals by starting small and building on your successes.

FOLLOW A BUDGET

Making a budget will help you keep track of your monthly expenses and will show you where you need to cut back. There are several software programs, apps and spreadsheets, like mint.com and the Left to Spend app, to help you get started. When you look at your total household income, use cnnmoney.com’s formula to see if you’re spending a reasonable amount on life’s necessities:

30% housing and debt payments

26% living expenses (including food, clothing, entertainment, medical, transportation and utilities) recommends saving for the car first, since the loans may take years to pay down.

TAKE BABY STEPS. Start getting your finances in order by making a manageable goal, like building an emergency fund. Slowly put aside $500 to $1,000 in a separate account. Then, calculate your expenses for one month and multiply that number by three. This number is the ideal amount to keep stashed away for emergencies, according to Reader’s Digest. So, keep adding to the fund until you reach your goal.

25% taxes

15% savings and retirement

4% insurance

PRIORITIZE. Don’t try to accomplish everything all at once. Instead, decide which area of your finances will make the most difference. For example, if you’re trying to pay down debt, try making an extra $100 each month by selling things you don’t need or taking a side job. But if you’re trying to save for a necessity (like a car) and pay off student loans at the same time, moneyunder30.com

PAY YOURSELF. When you’re paying bills, it’s easy to forget to pay yourself. Write yourself a check or transfer at least six percent of your paycheck to a savings or investment account. Treat it like a bill so that each month (or each paycheck) you’re saving money. Make it easier by setting up your account to automatically withdraw a specific amount and transfer it to your savings.

STAY MOTIVATED. For each small goal you achieve, make another small goal and take your financial success a step further. And instead of considering yourself a failure when you slip up, look at the progress you’ve made to keep yourself motivated.