No matter how young or old you are, it’s always a good idea to spend more time thinking about the way you handle your personal finances. There are so many money myths and traps that could easily lead you astray. For example, maybe you are a recent graduate celebrating with your first pay cheque.

It can be tempting to just start buying things like crazy because you consider these things as “rewards” for all the hard work you did both at school, and now at your new job.

However, saving for your future should be your greatest reward for all the hard work you do, but thinking long-term may not be at the forefront of everyone’s mind.

If you find yourself struggling with your personal finances, consider these tips to help you improve your personal finances without becoming a miserly penny-pincher.

Stop Lying To Yourself

This is the first step to improving your finances.

A lot of people know deep down that they have trouble managing their income and their expenses, but they try to brush it off by denying the problem.

They keep spending, making justifications and generally thinking that they have time to “improve” later on or when they make more money down the line.

The problem is that without recognizing the problem, you won’t be able to address and solve it.

The first step is to admit that you have financial issues (even if you’re not in debt, unnecessary spending or heavy reliance on retail therapy are problems, too) and to work towards solving it.

Pay Off Your Debt

There’s a science to this. It’s not just making the payments monthly in a plodding manner. First, you have to identify the card (or the loan) that has the highest interest rate.

This is the one making things a lot more difficult for you. Try to prioritize this and pay more than the monthly minimum, if you can.

Remember to pay on time, too, because late payments incur high fees.

As well, if you have owned your home for a few years and the interest rate on your mortgage is higher than mortgage interest rates are today, consider refinancing your mortgage.

The benefit to doing this is that you will end up with a lower monthly payment, and then you can apply the difference between what you use to pay and what you are now paying, to pay off any other debt you may have.

Curious if this would work for you? Check out the most current refinance rates to see if it would be beneficial for you to refinance.

Live Within Your Means

Spending isn’t always as simple as the act of buying a specific item or service.

Within the process are complex emotions and attempts to address said emotions.

That’s why a lot of people fall prey to retail shopping.

You might be buying a specific item not because you need it, but because you’re in the throes of envy, lust, anger, disappointment, etc.

To prevent excessive spending, create a budget and stick to it.

Pay Yourself First

Most of the time, people leave their savings for last.

This means that they pay off everything they need to pay, buy the things they want, and then save whatever is left over.

The problem is that there’s rarely anything left to save in such a system.

Instead, pay yourself first.

Set aside a certain amount from your salary immediately after receiving it and send it straight to your savings account.

Learn About Investments

You have to educate yourself and learn how to make your money work for you.

There are many different types of investments, such as stocks, bonds, real estate, and so on,  and with some research and knowledge, you can choose the one that is best for you.

managing your personal finances

Set Financial Goals

It can be difficult to focus on saving and improving your finances when you don’t think long term.

One way to motivate yourself to manage your finances well and to stay on track is to think about your long-term goals.

What do you want to achieve? For example, would you like to buy an acreage one day, or would you like to take an around the world cruise?

Perhaps you would like to retire somewhere other than where you currently live and maybe that includes buying a nice condo on the beach.

Write down your long term goals and then do some research about them.

As you do your research you will become even more excited about them. As well, estimate how much money you need to accomplish each goal and then use your research to try to validate those numbers.

Shop Your Stash

Before you head out and buy new items, go through your closet and see if you have something similar.

This phrase was coined by beauty bloggers who advocated “shopping” their stash of makeup first before heading out to the cosmetics stores to buy anything new.

This suggestion will also work well in your kitchen.

How many times have you stopped at the grocery store on your way home from work to grab something for dinner because you couldn’t remember what you had in your fridge, freezer or pantry?

Next time, shop in your kitchen before you shop at the store.

Use Online Budgeting Tools

Budgeting can be difficult if you don’t know how to get started, so make use of the many budgeting tools available online.

These often come with mobile apps, too, so you can stay on top of your finances even while you are on the go.

Don’t Pay Too Much For Insurance

Have you reviewed your insurance contracts lately?

Discuss these with your agent, as you might be paying too much for certain riders you don’t need. It’s a good idea to do the review regularly (annually is perfect) so that you can re-negotiate the terms and make sure you’re not paying too much.

Protect Yourself From Identity Theft

Identity theft can destroy your credit rating and prevent you from getting the loans you need. It’s also an uphill battle once you’ve been victimized.

It can take years before you regain your footing.

Have An Emergency Fund

Savings are different from emergency funds. This fund is for big unexpected expenses. It’s a good idea to have an amount of money ready in case anything happens.

Set Aside Money For Fun Stuff

You don’t have to deprive yourself; just make sure you keep track of your “fun” spending.

Set aside an amount each month for dining out or going out with friends.

One thing to keep in mind is that whatever you spend your “fun” money on, make sure it is something you truly enjoy.

That way you will feel like you had a special treat and hopefully that will see you through until your budget allows you to go out again.

As well, by allowing yourself some fun money you won’t be unhappy toiling away without even a bit of opportunity for relaxation and fun from time to time.