The key to keeping your personal finances in a good state and debt-free is to keep things organised. With spring now upon us, it’s a good time to think about “spring cleaning” not just your home, but also your personal finances.
Putting your finances in order is not as difficult as it sounds. Once you’ve created a budget, set up your paperwork and bills. You will then find it easier managing your personal finances and offsetting your debts, maybe even resulting in savings to spare.
Ready to spring clean your finances? Let’s get started with these 5 steps.
Clearly note down your financial goals
To be in control of your finances, you need to first clearly write down your goals. As simple and commonplace as it sounds, you’ll find it truly helpful.
Whatever your financial objectives are for the year, no matter how big or small, simply note it down in your money diary. Do you want to save money this year? Do you want to eliminate debt? Or you do want to increase your monthly savings by a certain amount?
Another thing to note on this point: make sure to carry everyone concerned along; whether your spouse, your kids or every member of the household. It keeps everyone focused and on the same page.
If a year’s planning is too big or complex for you to manage, then break it down into more manageable chunks, like weekly or monthly plans.
Draw up a budget
The next thing to do after noting down your personal finance goals is to create a budget. Which can be done by writing it down on paper or creating a spreadsheet. There are also some online tools to help you with your budget plans.
Simply go with whatever suits you best, making sure to account for all your earnings and expenditure when drawing up the budget. Don’t leave any stone unturned, to avoid any unpleasant surprises in the future.
Always prioritize your needs over your wants. Only add the latter when you have some extras to afford it and when you’ve really got your finances under control.
Track your spending
Budgeting, as early pointed out, is like a treasure map to lead you to your financial goals. Sometimes you need the help of a financial advisor or smart app to help you create one that isn’t only customized to your unique personal financial goals, but can also help you track spending, so you can keep your long-term plans.
With a helpful budget calculator and spending tracker app, for example, you’ll take control of your money better and be able to stay within your budget.
Occasionally review your budget
Most people don’t really emphasize this area within financial planning. But it’s a critical part; as change is constant in life, including a person’s financial situation. With every unexpected change – good or bad – make sure to go back to your financial layout and make adjustments where necessary.
Automate your bill payment
It is absolutely essential to get yourself out of debt when trying to create an improved personal financial status for yourself. One way to get this done is to create a checklist of all your bill payments, dates and processes. Set up a reminder or alarm and automate payments through online transfers at due dates, so you don’t miss out on any payments.