Personal finance is something which can cause a lot of real concern for many people and it is something which is most people spend an awful lot of time thinking about. What if we were to tell you though that personal finance doesn’t need to be complicated? It may sound a little blasé to hear but the truth is that managing your money is only made difficult by the complicated way in which we address it, and the nuts and bolts of staying on top of your money are actually very basic. To help you get a better grip of what is going on with your personal finances, here are some hints which you may get some benefit from.
Goals are very important because they help us strive towards something, this is no different when it comes to your money and the financial goals which you set yourself. We all have different aims, some may be looking to pay off a credit card, others are perhaps saving up for a vacation, or looking to reach a savings goal, maybe even to become mortgage free, whatever your goal is you should lay heavy focus 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 goals and the result is that you will be more financially responsible month to month.
Many don’t spend the time on writing up a budget because they are either too scared of what it will look like in black and white or they think that they don’t need to as it is all logged in their head. The truth is however that your money movements are 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, don’t underestimate that writing things down will help you even further when it comes to managing your cash. A balance sheet written out a month in advance is all you need to do, write down how much will you make on one side, how much you will spend on the other, do this monthly in order to stay on top of your personal finances.
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, and be strong to avoid temptation. Keep this money separate from any other savings which you have and try to forget about its existence. This will help you when you are in a hole and it can also help you to stay away from getting into any debt which isn’t necessary.
A recent study by CNBC found that 78% of Americans are living paycheck to paycheck and if you fall into that category, whilst it may be tough, you need to stop the cycle. In order to do this you need to know where exactly you are spending your cash each day, that daily coffee, take-out lunch, cinema trips, spontaneous clothing purchases, they all add up. For best results 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.
Keep things simple, be sure to plan well, work hard to reduce spending and always put savings first once your monthly bills have been paid.