Personal finance is something which causes a great deal of concern for many people and it is something which is uppermost in everyone’s mind. What if we were to tell you though that when it comes to personal finance, it really doesn’t need to be complicated? It may sound a little blasé to hear but in truth managing your money is only difficult when we complicate it and the nuts and bolts of staying on top of your money are actually very basic. To help you get a better grasp of what is happening with your personal finances, here are some tips which you may find useful.
Many don’t sit down and write up a budget because they are either too scared of what it will look like or they think that they have it all logged in their head. In terms of being fearful, your money movement is a fact of life and the longer you ignore them, the worse they will get, for those who think they have it all worked out, writing things down will help to ensure you don’t forget anything. A simple balance sheet a month in advance is all you need, how much will you make on one side, how much you will spend on the other, do this monthly and at the very least you’ll have a full view of your finances.
Goals are very important because they help us strive towards something, this is no different when it comes to your money. We all have different goals of course, to pay off a credit card, save up for a vacation, reach a savings goal, become mortgage free, whatever your goal is you should focus heavily on it. Write out what your goal is and what you need to do each month to achieve it, this will keep you focussed on your goal and more responsible month to month.
A recent study by CNBC found that 78% of Americans are living paycheck to paycheck and if you fall into that category you need to stop the cycle. To do this you need to know where you are spending your money, that daily coffee, a sandwich, cinema trips, spontaneous clothing buys, they all add up. Use an app which tracks spends and then review at the end of the month, you will be surprised at just how much unnecessary spending you’ll find, track it and stop.
If you lost your job today how would you survive? Perhaps the car breaks down, do you have the funds to pay it off? This are the type of situations where people rack up debt to survive which is why the smartest approach is to save some money for a rainy day. Try to have at least $1000 in a savings account which is not to be used for anything other than an emergency. Keep this money separate from your other savings and forget about it even existing. This will help you when you are in a hole and it can also help you to stay away from getting into heavy debt.
Keep things simple, plan well, reduce spending and always put savings first once your monthly bills are paid off.