5 Effective Ways To Get Yourself In Order
Are you someone for whom managing your finances is a nightmare? Do you feel as if there is never enough money for any of the stuff that you actually want to do? Wouldn’t it be nice never having to worry about money ever again? We at CreditSmart realize sometimes the answer is….puzzling. Well we have two words for you- finance management.
Managing your personal finances need not be the mess that it is now. You got to get a bit organized, calculate your income and expenditure, cut down on the excesses, set aside for savings and plan for the future.
This article will discuss how to manage your finances in a better way. Although there are numerous things I would love to share on this topic, let me restrict this discussion to the top 5 effective ways to manage your finances.
Follow These And See Results
- Setting up goals: One of the first things you should do is to write down what you want with your life. This will give you a better idea as to how much you can spend and how much you should set aside to fund the dream. Goals vary with people. Some may want to travel the world, while others may be contend with an early retirement. You are in control of what you want to do with your life and hence, plan accordingly. And it is possible that you may have more than one goal in life like repaying that car loan or buying a new house. That is absolutely fine and the next step would be to prioritize your goals.
- Planning: This is a crucial step. This is what will help you achieve your goals. It should be detailed and well thought of. For instance, if your goal is to buy a house, you should start by setting short term goals like clearing all the current debts, which in turn will require more financial planning. Getting the drift? Once you lay down your income vs expenditure table, it becomes a lot easier to identify where you can cut down on, which can then be set aside for your dream fund. If you find the concept too confusing or is unable to plan your budget, attending a personal finance class would help.
- Always stick to your budget: Setting a budget is crucial as this will prevent overspending or impulse buying. Even if you get a raise at work, having a budget to adhere to will ensure that the extra cash is not spent in an unplanned manner. Always try to get your spouse on board as well. Review the budget and spending every fortnight and highlight areas that needs revision.
- Say goodbye to debt: Before you can start setting aside money to achieve your goal, you need to get out of your current debts. Create an action plan for the next six months and figure out ways to eliminate all outstanding debts. Once you have it under control, make a commitment to yourself that you will not fall into a debt trap again. Keep credit card spending to a bare minimum. Set up an emergency fund to discourage reliance on credit cards.
- Seek advice, when necessary: It is perfectly alright if at times you feel overwhelmed by all the planning and budgeting and require a helping hand. You can always seek the counsel of a financial planner to better manage your cash. They can help devise a long term strategy that will meet all your current requirements, get you out of your debt in the medium term and help you achieve your goals in the long term.
The above tips can go a long way in helping you manage your personal finances. If you are someone who has never given it a serious thought, now is as good a time as any to start! Of course, knowing your CIBIL score never hurts either.
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