Getting a handle on your personal finances is one of the most important steps you can take toward a secure and stress-free future. 

Use these fundamental concepts to build a strong financial foundation.

Personal finance is for everyone

Understanding the ins and outs of personal finance isn’t just for the wealthy or financial experts. It’s for everyone. It can help you make good decisions, achieve your goals, and handle unexpected expenses without panic. 

By mastering the basics, you can take control of your money rather than letting it control you.

Budgeting

Taking control of your money starts with creating a budget — a simple plan for how you’ll spend and save your money each month. 

A budget helps you see where your money is coming from and where it’s going.

How to create a budget

1. List your monthly income

Write down all the money you receive each month, such as:

  • Your paycheck after taxes
  • Side job or freelance earnings
  • Any other income (like child support)

2. List your monthly expenses

Make a list of everything you spend money on each month:

  • Fixed expenses (stay the same): rent or mortgage, car payments, insurance, subscriptions
  • Variable expenses (can change): groceries, utilities, transportation, entertainment

3. Calculate the difference

Subtract your total expenses from your total income:

  • If you have more income than expenses, you’re doing great. 
  • If your income and expenses are the same, you’re essentially living paycheck to paycheck. 
  • If you have more expenses than income, you’re spending more than you earn—and probably taking on debt to get by.

A lot of people are living paycheck to paycheck or spending more than they make these days, so if you’re in that boat, you’re not alone. 

Wherever you are today, consider it a starting point. Look for places to cut back on your spending so you’ll have more room to manage surprises, pay off debt, and save for the future.

4. Adjust your spending

Look for ways to spend less. Here are a few ideas:

  • Eat out less and cook at home
  • Cancel subscriptions you don’t use
  • Find deals and use coupons

Small changes can make a big difference.

5. Set your financial goals

Decide what you want to achieve, such as:

  • Build an emergency fund
  • Pay off debt
  • Save for something special

Keep these goals in mind as you plan your budget.

6. Choose a budgeting method

Pick a budgeting style that fits you:

If you aren’t sure which one sounds right for you, this post walks through them all.

7. Track your spending

Keep an eye on your expenses:

  • Use a tool like Quicken Simplifi to monitor spending
  • Note expenses in a notebook or app
  • Review your spending regularly

8. Review and adjust monthly

Check your budget every month:

  • Update for any changes in income or expenses
  • Make sure you’re progressing toward your goals

By following these steps, you’ll create a budget that helps you manage your money effectively and work toward a secure financial future.

Savings

Building up your savings is a step toward financial security and achieving your future goals. Whether you’re saving for an emergency fund, a big purchase, or just want a financial cushion, setting aside money regularly can make a significant difference over time. Let’s explore some practical steps to help you start saving effectively.

1. Set clear savings goals

Knowing what you’re saving for can motivate you to stick to your plan.

  • Emergency fund: Aim to save at least three to six months’ worth of living expenses.
  • Big purchases: Saving for a car, home, or vacation.
  • Future plans: Setting aside money for education or retirement.

Next steps:

  • Decide on a specific goal and the amount you want to save.
  • Break down your goal into manageable monthly savings targets.
  • Write down your goals and keep them where you can see them regularly.

2. Keep your savings separate

Keeping your savings in a separate account makes it less tempting to dip into them for everyday expenses.

Next steps:

  • Avoid linking your savings account to your debit card.
  • Treat your savings as off-limits except for their intended purpose.

3. Open banking accounts

When you save money in an account with a higher interest rate, your money grows faster. There are some great banks both online and offline, depending on your needs.

  • Checking accounts: Designed for daily transactions like paying bills and making purchases. They usually come with a debit card and checks, making it easy to access your money quickly.
  • Savings accounts: intended for money you want to set aside for future needs. They typically earn interest, helping your money grow over time.
  • For higher interest rates: High-yield savings accounts offer better interest rates than traditional savings accounts, so your money grows faster. Just like regular bank accounts, your money is protected through the FDIC up to $250,000

Next steps:

  • Use your checking account for everyday expenses and your savings or high-yield account to store money for future goals.

4. Automate your savings

Making your savings automatic can help you stay consistent without having to think about it.

Next steps:

  • Set up automatic transfers from your checking account to your savings account each time you get paid.
  • Even small amounts add up over time, so start with what you can afford.
  • Consider increasing the transfer amount when you can, like after a raise or when you’ve paid off a debt. 

5. Monitor and adjust your savings plan

Regularly checking on your savings helps you stay on track and make adjustments as needed.

Next steps:

  • Use tools like Quicken Simplifi to track your savings and see your progress.
  • Review your bank statements monthly to see how your savings are growing.
  • Adjust your savings plan if your financial situation changes or if you reach a goal and want to set a new one.

Debt and credit

Carrying extra debt can put a heavy strain on your finances, making it harder to achieve your financial goals. High levels of debt mean that more of your income goes toward interest payments, leaving less money for saving, investing, or everyday expenses. 

By managing your debt effectively, you can reduce stress and improve your overall financial well-being.

Understanding your debt

The first step in tackling debt is to get a clear picture of what you owe. Make a list of all your debts, including credit cards, student loans, car loans, and any other obligations. 

For each debt, note the following:

  • Outstanding balance: How much do you currently owe?
  • Interest rate: What is the annual percentage rate (APR) for each debt?
  • Minimum monthly payment: What is the smallest amount you need to pay each month?

Having this information in one place gives you a better view of your financial obligations. It helps you identify which debts are costing you the most, so you can prioritize them accordingly.

Creating a debt repayment plan

Once you understand your debts, the next step is to create a plan to pay them off. Prioritizing debts with higher interest rates can save you money over time because these debts accumulate interest more quickly. Here are two strategies you might consider:

  • Debt avalanche method: Focus on paying off debts with the highest interest rates first while making minimum payments on the others. This method can reduce the total amount of interest you pay over time.
  • Debt snowball method: Start by paying off the smallest debts first to gain a sense of accomplishment and build momentum. Once a debt is paid off, apply that payment amount to the next smallest debt. This approach can be motivating and help you stay committed to your plan.

Choose the method that best fits your personality and financial situation. The key is to stick to your plan and adjust it if your circumstances change. For example, if you receive a bonus or tax refund, consider putting some of that extra money toward your debts to accelerate your progress.

By actively managing your debt, you’re taking control of your financial future. Reducing or eliminating debt frees up money each month, giving you more flexibility to save for emergencies, invest for the future, or enjoy life’s pleasures without financial worry.

Building and maintaining a good credit score

Your credit score affects your financial opportunities. Build and maintain it by paying bills on time, keeping credit card balances low, and regularly checking your credit report for errors. These simple steps can help you achieve your long-term financial goals.

Next steps:

Pay all bills on time, reduce credit card balances, and check your credit report for errors to see gradual improvements.

Building a strong credit score can open doors to better financial opportunities, helping you achieve your long-term goals.

Investing and retirement planning

Investing and planning for retirement can help you build long-term financial security. Even if you’re just starting, taking small steps now can make a big difference in the future. 

Here’s how you can begin.

Understand the basics of investing

Investing means putting your money into assets that have the potential to grow over time, like stocks, bonds, or mutual funds.

Next steps:

  • Learn the fundamentals: Read beginner-friendly articles about investing to get started.
  • Set investment goals: Determine what you’re investing for—retirement, a home, education—and how long you have to reach these goals.
  • Create a plan: Work with a financial planner to build a plan that works well for your situation, with a level of risk that makes you feel comfortable.

Start with retirement accounts

Retirement accounts offer tax advantages that can help your money grow faster.

Next steps:

  • Join your employer’s plan: If available, sign up for your company’s 401(k) or 403(b) plan.
  • Contribute regularly: Aim to contribute a percentage of your income each month.
  • Take advantage of employer match: If your employer offers matching contributions, contribute at least enough to get the full match — it’s essentially free money.
  • Open an IRA: If you don’t have an employer plan, consider opening a traditional or Roth Individual Retirement Account (IRA) at a bank or brokerage.

Begin investing in small amounts

You don’t need a lot of money to start investing.

Next steps:

  • Use micro-investing apps: Platforms like Acorns or Stash let you invest small amounts regularly.
  • Automate your investments: Set up automatic transfers from your bank account to your investment account to build the habit of investing.

Diversify your investments

Spreading your money across different types of investments can reduce risk.

Next steps:

Set clear retirement goals

Knowing what you need for retirement helps you plan more effectively.

Next steps:

  • Estimate your retirement needs: Use our free online retirement calculator to figure out how much money you’ll need when you retire.
  • Create a plan: Work with a financial advisor to plan out the best way to reach your goal.

Monitor and adjust your plan

As your life changes, your investment plan may need to change too.

Next steps:

  • Review your investments annually: Check how your investments are performing and make adjustments if necessary.
  • Increase contributions over time: When you get a raise or reduce expenses, consider increasing the amount you invest.
  • Rebalance your portfolio: Ensure your investment mix still aligns with your goals and risk tolerance.

Seek professional advice

Getting help can make a big difference.

Next steps:

  • Consult a financial advisor: They can provide personalized advice based on your situation.

Remember, investing and retirement planning don’t have to be complicated. Start small, stay consistent, and don’t hesitate to seek help if you need it.

Continuing your financial education

By understanding the basics and staying committed to your financial goals, you can build a secure and fulfilling future. Remember, it’s never too early or too late to start managing your money wisely.

Here are some government and educational resources to help you learn more:

1. MyMoney.gov

MyMoney.gov is a website created by the Federal Financial Literacy and Education Commission. It’s a one-stop shop for learning the basics of financial management. 

The site covers a wide range of topics, including budgeting, saving, investing, and understanding credit. It provides practical tips and tools to help you make informed financial decisions. 

2. Investor.gov

Operated by the U.S. Securities and Exchange Commission (SEC), Investor.gov is designed to help you become a more informed investor. The website offers educational materials on how markets work, the different types of investment products available, and how to protect yourself from fraud. 

It’s a great place to learn about investing fundamentals, assess your risk tolerance, and understand the importance of diversification. The site also features calculators and quizzes to test your knowledge and plan for your financial future.

3. Consumer Financial Protection Bureau (CFPB)

The CFPB provides a wealth of information to help you navigate the financial challenges of everyday life. Their website offers resources on managing debt, understanding mortgages, handling student loans, and planning for retirement. 

They also provide tools to assist with budgeting and tips for avoiding financial scams. The CFPB’s materials are written in clear, accessible language, making complex topics easier to grasp.

Track your finances

The best way to keep your finances moving in the right direction — from your budget to your retirement plan — is to track them regularly. 

And the easiest way to do that is with Quicken. 

Manage your budget, track your debt, watch your investments, grow your savings, and reach your goals with confidence.