Taking control over your money and making your own decisions, will guarantee that you achieve financial independence. Also, by assessing and acknowledging what you can afford, and by keeping track of your expenses, you'll minimize the risk of making serious financial errors. You'll be able to make the best financial decisions on your own, without the help of an expert financial advisor.

So, to reduce your anxiety over your cash flow and finances, we've put together 7 Steps to on how you can become a Master of Your Finances.

Financial Assessment

Before you can start controlling your finances, you must examine your financial situation. You should know exactly what income you earn and the level of your expenses. Acknowledging these two indicators will help you understand and improve your finances.

Also, account for any quarterly and yearly expenses such as taxes and any insurance fees. And, shop around to find the best rates to discover the best health, car or house insurance fees. For example, you can use online tools to compare car insurance rates which will highlight the best offers available on the market.

Discover Your Net Worth

Make a list with your assets such as savings accounts, investment accounts, any movable assets or real estate which you own. Next, write down all your liabilities such as mortgage and credit card balances, any credit facilities which you've contracted and other debts.

Establish the total amount which you owe and subtract the value of your assets. The number you reach is your net worth.

Financial Goals

After discovering your net worth, you must set financial goals. If you don't establish a goal, it's unlikely that you'll achieve it. However, you must set a specific and clearly defined goal and not a general one such as paying off your debt or saving money for future emergencies. For example, if setting up an investment portfolio is your goal, you must define the assets in which you want to invest and the amount of money you wish to use.

Consolidate Your Bank Accounts

By consolidating your bank accounts with one or two banks will streamline your financial situation. Instead of handling multiple bank account statements, you can be dealing with 2 at the most. And, when you have fewer bank accounts, you incur fewer fees, tax forms, and credit card deadlines. Through account consolidation, you can track your money easier and gain a clearer view of your income and expenses. Account consolidation will also reduce your risk against identity theft.

Set up and Stick to a Budget

Establishing a budget is time-consuming but the benefits are worth it. You'll be less likely to incur future debts, unexpected expenses and you'll enjoy a better credit rating, higher chances to have a mortgage approved and you'll identify areas where you can save more money.

Calculate and list your household and living expenses, insurance fees, gifts for family and friends, travel and leisure costs. To simplify the procedure, you can use various free online budget planning tools. You can save and edit the information whenever you log into the program or app.

If your expenses exceed your income, you must cut back on your spending. It can be as simple as eating homemade meals or canceling that gym subscription which you're not using.

Get Out of Debt

The first step to get out of debt is knowing the level of your indebtedness. You should audit your finances and calculate what amount you owe. Next, you should prioritise your debts and place mortgage, rent, energy and council fees at the top of your list. Save money where you can and consolidate your debt with a bank which offers low-interest rates.

Automate Your Finances

The key to financial independence is to build processes and systems which will restrict any undesirable and reckless behaviours and promote financial awareness. It comes down to engineering your financial life.

By automating your finances you'll achieve your goals by setting up positive and long-term financial habits which will fight any temptation to deviate from your system. You should open the right accounts such as a primary checking account and establish a 25% - 50% cash cushion of your monthly expenses to prevent any overdrafts or other unpleasant surprises.

Gear up on financial automation by prioritizing automatic payments to your retirement savings account and to your emergency fund. Next, you should set up the payments to cover your bills and household expenses. And, if you have an investment account, you can establish automatic transfers to it at a level which you're comfortable with.

Over a period of time, you can increase the amounts of money which you transfer to improve your savings account. Through financial escalation, you'll be reaching your goals in no time.

Author's Bio: 

Marina Pal is a renowned author and social media enthusiast.