Lack of organization can hurt your finances, just like not having enough money. Loss of accounts will result in late fees, and failure to track current account balances may result in overdraft fees. The steps below will help you stay on top of your financial life and save money in the long run.
First of all, you should close all your debts and loans. And the first is to close the loan with the highest rate. But the best thing, of course, is to try to close your loans ahead of schedule, making each month more money than the minimum payment.
● Even routine expenses like utility bills go up or down from month to month. Keep an eye on them and adjust your discretionary spending accordingly.
● Keep a list of monthly bills to avoid unpleasant surprises.
● Coordinate daily spending with significant people.
Sample questions that you should ask yourself to understand whether you normally take this into account or not, for example, are:
● how much money you have now,
● how much cash you have,
● how much and on which accounts you have,
● how much your total balance is,
● what your incomes are: for the last month, for several months, for the last year,
● what is your growth rate from year to year,
● how does your income change from year to year.
Do you have quick access to this information? If you know the answers to these questions, then you have an account and everything is fine with an understanding of the financial situation. If you don’t know this, you are not in touch with reality.
Try to find additional sources of income like Forex trading on https://www.forextime.com/education/indices-trading. With such a stash, you can live safely. It is best to keep it in a bank, at interest, and allocate there part of your income every month. Experts advise keeping at least an amount equal to your income for 3-6 months. This “airbag” will provide protection in unforeseen situations.
It is impossible to manage what you do not track in any way, and in money terms, it means to measure the amount of money, income, and expenses. Many people try to do it, start, and then abandon it. Why does this usually happen? Because you just don’t want to face reality and see that you have more expenses than income, that you are constantly in the red or loans.
Accounting is the basis. You need to know what is happening with your money to put it in order. Financial software is not just for investing. Free basic budgeting apps are available online to help you keep track of your daily and household expenses.
According to Forextime, you should start saving for retirement in advance. Moreover, this can be done at least at the age of 20. The main thing is to think over a strategy: where and how you will store your savings:
● a long-term deposit,
● a program in a non-state pension fund,
Moreover, part of the money should be transferred to foreign currency, most likely in 20-30 years, you will be able to profit well from this.
If you are sharing the budget with a spouse or significant other, you can easily charge back a check or debit card payment if you do not know how much the other person has spent. Let’s say, your spouse has a day off and decides to have lunch and play golf with a friend in Nigeria. When you get home, you hear about a great game of golf. What you do not hear is that it costs $150 and your direct debit student loan payment will stop soon.
If you do not have your own home, you should decide: will you rent a house and save for your own or take out a mortgage. And even if you are satisfied with your position now, no one can say in advance that in a couple of years, you will not want, for instance, to increase your living space or move to another area. It is also worth thinking about this in advance.
Your task is to curb your impulsive, sometimes childish behaviour and switch to a good, mature, adult one. You act based on the principle of deferred reward, you know how to spend money based on your real income today, you have closed debts and loans.
Don’t forget: your personal finances are fine as long as you don’t have to go into debt (other than a mortgage). To do this, you should carefully plan everything and start saving in advance so as not to be disappointed later. The hallmark of effective financial planning is its flexibility and a