One of the important things in one’s life is taking care of one’s financial status. You should be on top of your finances at all times, especially in these times of economic downturn.
There are cases where people lose losing hard-earned money simply because they aren’t aware of their financial status. Instead of saving some money, some spend unnecessarily. Some even borrow unnecessarily just to sustain today’s needs, but having to pay for these in years to come. Then there are those cases where one could get savings from discounts or rebates. But without filing the necessary paperwork because of forgetfulness or ignorance, you end up spending more. These small things could count for a lot in the end, especially with the financial crisis. It always helps to have a little extra money.
- Keep things in balance. One way to organize your financial life is to keep track of your cash flow and your bank accounts. For example, you can list down all sources of income, whether form your job, business, or other things. Then you should have a list of regular or monthly expenses based on how much you expect to pay, including rent, utility bills, credit card payments, mortgage and car payments, groceries and the like. These are usually regular expenses, anyway, so you could expect to pay pretty much the same amount month after month.
- As you pay each bill and expense, list them. Then count these against your monthly income, after which you get your net savings in each month.
- Give yourself an allowance. One big mistake people do is splurging right after they get their paycheck or profits from business. The smart thing to do here is to include a weekly or monthly allowance for yourself as part of your monthly expenses. You can include here money for food, for your daily commute, or for some personal needs that you feel you can spend on when you have something extra. This way, you don’t dip into your savings when you need to spend on yourself.
- Pay on time. You save on fees and surcharges if you pay your bills and mortgages on time. There are online billing programs can help remind you when bills are due. If possible, consolidate the paying of your bills. Some banks and card companies allow you to auto-debit bill payments from your account. Just be sure to keep track of these, so you don’t overspend.
- Keep separate bank accounts for savings and for current expenses. Some banks offer combination savings and checking accounts, but beware of putting all your eggs in one basket. Save your money in a dedicated savings account, and if possible a time-savings account, which earns more. Then keep your money for paying bills, rent or other necessary expenses in a different checking account, so you can just easily write out checks for these.
- Remember to keep track of your accounts, too. Checking accounts have expensive over-draw fees. So be sure to list down all your check issuances, so you don’t reach a negative amount. Savings accounts, meanwhile, will charge you if you go below the minimum amount.
Organizing one’s financial life requires discipline. But in the end, it will be worth it. It’s better to have headaches over the money that you have than have headaches for not having any money at all.