Money, it’s nice to have, but sometimes hard to get. As those who have been managing their finances for ten years or more can tell you, it can be a rocky road. People sometimes forget to pay what’s due on their credit card on time, suddenly face an unexpected expense, or get laid off (become unemployed).
Managing finances is basically a question of getting organised, knowing where your money is coming from, when, how much, and monitoring expenses. Let’s have a look at some useful suggestions that may help you:
1. Open a savings account
This really is a no brainer. If you want to get organised with your finances, you need a savings account to make sure you save some of your disposable income, i.e., the money you have left after the essentials are paid for. Ideally, aim for putting aside 25% of your spare cash each month.
If you want to be financially sound, you need to have some money to fall back on. Forty-five percent of Americans are only one paycheck away from financial ruin. For those of you who believe there is nothing left over after paying the rent/mortgage, utilitiy bills, etc., surely a very tiny amount each month is possible, isn’t it?
2. Create a spreadsheet for expenses
Give yourself a financial check-up. Create a spreadsheet that lists all your regular monthly outgoings, so you can easily see where your money is going. Then, monitor all your other expenses carefully, and also add them to your monthly total.
If you can, go through each expense and see if you can get cheaper options. For example, could you get a better deal with your electricity supplier? You could even check out other utility companies.
3. Use a calendar to remind you to pay your bills
With a calendar, you can be better organised and not forget important bills such as water and other utilities. Even the best of us forget things, so take advantage of your smartphone and maybe even download a financial planning app.
Paying your bills on time is not only good for your peace of mind, it also helps your credit score and credit history.
4. If you can afford one, hire an accountant
Having an accountant is a great way to manage your finances. For many of us, finding our way through the maze of accounting procedures and tax laws is both cumbersome and confusing. A qualified accountant can rapidly simplify everything for you, and perhaps even reduce the size of your tax bill.
5. Manage your debt
One of the biggest hurdles to getting on top of your finances is debt. If you are finding there is not enough capital in the accounts to cover them, or you are drowning in interest payments, you should seriously consider debt management or debt consolidation.
Debt consolidation means taking out one loan that covers the total of all your debts and using that money to pay them all off. Then, you can focus on the repayments for just one loan.
If you are in dire straits, talk to your creditors and see whether you can negotiate reduced payments. It is crucial that you talk to them. Don’t hide!
6. Open an IRA (Individual Retirement Account)
You need to save for your retirement. Nobody knows whether there will be any SSI when you retire. The prospect of living on $1200-$1500 a month is a bleak one. What if you need major surgery or you get cancer later in life? The only person you can rely on is yourself. Most financial advisors recommend saving about 15% of our monthly income for retirement.
7. Take out a loan
Sometimes in life, when unexpected expenses arise, you may find yourself with zero income. The car may have broken down or the sole breadwinner in your household is made redundant. According to Sunshine Loans, which helps people get fast loans, borrowing money is an effective way of getting on top of your finances when you are short of cash.
Loan’s get a bad rap, but they are there for a reason. If you manage your repayments responsibly, not only will you find it easier to move forward, but your credit score will also benefit.
8. Subscribe to a financial magazine or message board
The world of personal finance is a vast field that is forever evolving. The only way to be aware of new developments, products, and services is to regularly read articles from financial journals. Some publications focus specifically on personal finance. Message boards are also a good source of information.
Hopefully, after reading this article, you are now in a better position to get on top of your finances. Good luck!