Many people want to create a budget, develop a financial plan, or take a more active role in managing their investments. However, with so much financial advice available, beginners may feel overwhelmed. To make it easier, it helps to start with one simple step.
Below, 15 professionals from Forbes Finance Council share their recommendations for getting started on managing and tracking your personal finances.
1. Define Your Financial Goals
The first step in creating a financial plan is to think about your long-term goals. Many people go to work each day without considering what kind of lifestyle their income is supporting. Beyond knowing your expenses and income, it’s important to have a clear vision of what you want in life. – Tony Sablan
2. Track Your Spending
Understanding where your money goes daily, weekly, and monthly is key to building a financial plan. One downside of using cash is that it’s harder to track spending. Using a debit or credit card allows you to organize and analyze your expenses, making it easier to build a solid financial plan. – Will Duffy
3. Calculate Your Net Income
Saving is essential, no matter your age. When reviewing your monthly income and expenses, focus on your net income—the amount left after saving at least 15% of your gross income. This savings should be spread across different types of accounts, including taxable, tax-deferred, and tax-free options, and should be automated for consistency. – Dawn Dahlby-Jurkovich
4. Know Your Fixed Expenses
Many people don’t have the option to earn extra income, so understanding fixed costs is crucial. Determine your essential monthly expenses first, then create a budget around them to ensure financial stability. – JD Morris
5. Use Multiple Bank Accounts
Managing finances with a single bank account can be challenging. Instead, categorize your budget into a few key areas and set up separate checking accounts for each. This makes it easier to track spending without having to do complex calculations. – Vlad Rusz
6. Invest Regularly
Budgeting isn’t always easy or enjoyable, so keep it simple. Automatically transfer a portion of each paycheck into an investment account—not just a savings account. This helps you grow your money while avoiding the temptation to spend it. – Michael Foguth
7. Seek Advice from Your Network
Start by reaching out to people in your network. Many business professionals have useful templates and tools they are willing to share. Learning from their experiences can help you make better financial decisions. – Kelly Shores
8. Pay Yourself First
Before paying bills, set aside a percentage of your paycheck in a separate bank account. Many people spend most of their earnings before thinking about savings. By prioritizing savings first, you force yourself to live within your means. – Matthew Meehan
9. Monitor Your Credit Score
Checking your credit score is an important first step in assessing your financial situation. Your credit score affects loan eligibility and interest rates. If your score is 650 or higher, consider consolidating debt under a low-interest account. – Tyler Gallagher
10. Use Financial Tools and Take Small Steps
Many banks and credit card companies offer free financial planning tools. Also, take small actions like automating savings. Increasing retirement contributions at work is a smart move since it helps you save, takes advantage of employer matching, and lowers your taxes. – Jackie Meyer
11. Understand Your Investment Goals
Before investing, clarify your goal—whether it’s generating regular income or saving for the long term. A good investment horizon should be at least two years. Short-term trading often fails due to market unpredictability and emotional decision-making. – Azamat Sultanov
12. Document All Income Sources
People with multiple income streams, such as entrepreneurs and executives, often struggle with financial planning. To stay organized, document all sources of income, expenses, and assets before building a financial plan. – Brian Henderson
13. Organize Financial Documents
When creating a financial plan, take time to organize all important documents. Keep records of bank statements, investment accounts, insurance policies, and estate planning documents in one place to simplify financial management. – Meredith Moore
14. Use Budgeting Apps
Modern financial tools make budgeting easier than ever. Apps like Mint, Personal Capital, and PocketSmith allow you to sync all your financial accounts in one place, track expenses, set savings goals, and manage your budget more efficiently. – Zack Cook
15. Cut Unnecessary Spending
Small changes in daily spending can have a big impact. Cooking at home, making your own coffee, and shopping only on sale days can help you stay within your budget. Allow yourself occasional treats, but focus on saving more than you spend. – Jared Weitz
