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Keeping track of your personal finances is incredibly important, especially in the era of digital banking. Keeping a checkbook isn’t as common as it used to be, and with debit and credit cards, it’s easy to spend more than you actually have and push yourself into debt. Though it’s easy to get into a financially bad situation, it’s just as simple to keep yourself from falling into one by making a personal finance plan. Consider the following tips while working on your personal finance plan:

 

Create a budget.

 

This will give you the big picture of what you are and aren’t spending and compares it to what you’re bringing in income-wise. Don’t obsess over your budget, but having at least a spreadsheet outlining it will help you catch (and perhaps come to terms with) any rough numbers or issues within your finances. Likewise, calculating your net worth will help similarly.

 

Write down your debt.

 

No one likes looking at the amount of debt they have, especially if student loans have made it astronomically high. However, having it written down (the total, the interest, the minimum payment, the length of the loan, etc.) will help organize your payments. This includes figuring out what to pay first, whether you can pay extra on the loan or not, and more. It’s not pretty, but seeing all of this can be eye-opening.

 

Have a separate savings account.

 

This is less common than you might think, but having your checking account separate from your savings account will do you a world of good. The point of a savings account is to save the money when you need it, and keeping everything in one space will only tempt you to spend more than you have to. If it helps, have your savings account at a completely different bank from your checking account—one that you won’t touch save for emergencies. 

 

Sleep on your purchases.

 

Determine what you want versus what you need when it comes to buying something. It’s easy to give in to the temptation of buying something we see because we want it, and when you’re saving money and cutting back on expenses, that’s counterproductive. To figure out whether you should buy the item or service, sleep on it for a few days and come back to it. Nine times out of ten, you’ll realize that you don’t need the item or service after all, and your wallet will thank you.