We are all living through unpredictable economic times. Everyone is suffering in some way, from ridiculously high gas and grocery prices to increases in utility costs and medical insurance. For some, it has become nearly impossible to manage their finances, due to the many unknowns we face on a daily basis. In this article, we will go over some important steps you can take in order to better manage your personal finances.

The most important step you can take toward financial security is to spend less than you are earning. In a world where credit cards are offered to anyone who is employed, it is easy to fall victim to the monster called debt. If you need credit cards just to get by, you are living beyond your means. You will need to pay off debt and cut out all needless spending in order to live according to your income level.

The best way to learn how to live within your means is to implement a workable budget. First, list all your monthly income, including salary, rental income, alimony, child support and income from any other sources. The total of these amounts is the amount of money you have to work with. Next, list all of your expenses, leaving nothing out. Your expenses include: mortgage or rent, utilities, gas, food, auto payments, credit card payments and other expenses you may have. Subtract this total from your income to see how much, if any, you have left over. If you spend more than you bring in, you will need to budget for every expense, eliminating any needless spending, and cutting back on things like eating out and impulse buying.

Pay off your credit cards. If you cannot pay them off all at once, try to transfer all balances to one, lower interest, card. Pay as much toward this balance as you can each month until it is paid in full. Then, keep the card open and use it periodically, paying off the balance each month. You will need this credit activity to keep your credit scores high. Lenders want to see that you can manage some debt before they qualify you for a large purchase, such as a home.

Don’t neglect your retirement. You may be young, but retirement gets closer each day, and if you aren’t prepared, you will suffer. So, take advantage of any retirement plans or 401K plan that your employer offers. The contributions come out of your paycheck before taxes, so you save there, and some employers even match a percentage of your contributions.

It is important to have a savings account for emergencies and unexpected expenses. Whether you need some unplanned car repairs or to pay a medical bill, a savings account means that the money won’t have to come out of your monthly budget allowance.

Think about investing some money if the opportunity arises. If you get an unexpected bonus or inheritance, it may be a good time to look at investing some money in stocks or bonds. A financial planner can give you good advice as to what investments are paying well at the time.

Life insurance is always a good investment, especially if you have a family. If something were to happen to the main bread-winner in the family, your spouse and family will need to be provided for. Not being prepared for the worst can mean disaster to loved ones left behind.

Finally, keep good financial records. Keep records of all of your financial dealings, including your will, tax documents, and investment portfolio. Put copies in a fire-proof safe, and give duplicates to your attorney or keep them in a bank vault. Instruct your family members on how to access them, and provide keys or combinations to any locked containers.

After you get in control of your finances, start spending wisely. You never know what the future holds, so buy only what you need, and add to your savings account frequently. Of course, you will want to save for luxuries, such as vacations or an automobile if you need one, but steer clear of any old over-spending habits.

This basic information will help you to get started on the right financial track. Saving and managing your money well is an important step toward financial freedom, and you will find great peace of mind knowing that you are prepared for any situation that may come.