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Unfortunately, our schools don’t teach us enough about personal finance to help us survive in the adult world. Without this knowledge, it becomes all too easy to fall into a bad financial situation. This overview can provide you with the basics, so you can improve your finances, regardless of what stage of life you may be in at the moment.

Build an Actionable Budget

To get started, you have to work out a budget that will work for you. This means writing out your total monthly income and comparing it to your total expenses. If your expenses are more than your income, you either need to reduce what you owe or increase your income. As your situation changes (higher pay, additional expense, etc.), you should work out a new budget that accounts for those lifestyle changes. Instead of making a budget once and trying to force your changing life to fit within it, your budget should be regularly re-evaluated.

Cut Expenses

Even if your budget is fairly comfortable, you can still look for ways to cut expenses. There’s no reason to waste money that you don’t have to spend, especially when that can be put towards your savings. If you stream television online, there’s no reason to maintain cable or satellite service. If everyone in the household has a cell phone, you can also get rid of your land line. There may be dozens of other ways you can cut expenses without really sacrificing comfort.

Pay Down Your Debt

Now, it’s time to look at the amount you owe to your creditors. Imagine how much you could save by eliminating that debt. One of the best strategies for tackling debt is to use the snowball principle, which involves paying off the smallest debts first. As you pay off each debt, use the money you were devoting to that creditor to pay off the next smallest debt. If your debts seem too heavy to tackle, using a debt consolidation service, such as that which is offered by Graylock Advisors, can help you. By using this type of service, you can make your debts more manageable without having to resort to bankruptcy.

Rebuild Your Credit

You have already started to rebuild your credit by paying off what you owe. You can also improve your credit rating by ensuring every bill is paid on time each month. Even accounts that wouldn’t normally be reported to the credit bureaus, such as utility payments, will be reported for being late or delinquent. Another good way to rebuild your credit is to get a secured credit card with a low limit. Since a secured card is linked to a checking account, they’re easier to get and can help you rebuild a positive credit rating.

Start an Emergency Fund

The primary reason people fall into debt is because they get hit with unexpected financial emergencies. Expensive home repairs, car trouble, and medical care expenses are among the top reasons people end up relying on credit to survive. Remember that money you were using to pay off your creditors? Stop spending it. Instead, put it into a savings account and leave it there until you really need it. Finance experts, such as those at Graylock Advisors, recommend saving enough money each month to make your budget feel snug. You shouldn’t be putting away so much that you’re sacrificing the essentials, but you also shouldn’t have large amounts left over to spend, either.

Start a Retirement Investment Account

In addition to starting an emergency savings fund, you should also be contributing to a retirement account. You’re never too young to start investing in your future. You never know when illness or injury will strike and leave you facing a lifetime of healthcare costs. Additionally, cognitive and physical decline happens to everyone, sooner or later. Having a decent nest egg will help you take better care of yourself when you do reach your senior years.

Create an Estate Plan

Consider what you will leave behind for your spouse and children. While most states will distribute your assets among your spouse and children by default, it’s far better to have estate plans in place. This can help you ensure specific assets go to those beneficiaries you choose, such as leaving your home to a spouse. Additionally, a will can help ensure you get to choose who will be appointed guardianship of your minor children.

Arranging for Your End of Life Care

Many people don’t realize this, but estate planning also includes arranging for powers of attorney. Your estate attorney can help you set up a financial power of attorney, who will be responsible for managing your finances in the event that you’re unable to act on your own behalf. Similarly, a medical proxy can help you determine who will be trusted to make your medical care decisions. These documents will go into effect at a time when you may be physically unable to act for yourself, or when you may be mentally compromised. Failing to make these plans in advance may mean letting the courts appoint proxies whom you do not trust.

Using these guidelines, you can begin to create a better future for yourself. While it may take a few years, depending on your current circumstances, following a well-planned strategy can help you improve your financial situation. In just a few years, your economic struggles will seem like a bad dream.