Financial stability depends on relatively simple actions -
basically planning and discipline. Organizing finances is the first step toward
realizing dreams and projects. Making money in today’s hard economy is not an
easy job. Whether you are a salary worker or self-employed, you might have
noticed that what comes at the end of the month is not enough. Which makes you
delay bills not having enough to care for yourself and your family. Maybe for
you what comes is enough but you do not make any good use of what comes into
your hand. You buy too much and even things you do not need.
To get away from this, check out these 10 steps on how to
organize personal finances
Take a pen and paper and
access your finance
So many people, no matter how hard they try they just can’t
achieve financial equilibrium because they do not have adequate control over how
much is earned and how much is spent and it one biggest reason why many fail at
their finances. To begin organizing your financial life, start writing down
your income and expenses. If the difference between what you earn at the end of
the month and what you spend is negative, your finances are not going well.
This is where you can start from since you have identified your main expenses
and the ones blowing out the budget, you can now decide what to cut and massage.
You do not always make
budget so start making one
It is very important and prudent to set aside one day every
month to organize your financial life. Today there are a number of computer
software and mobile apps that help you stay organized. Just how governments and
businesses do, you must create a budget for your revenue allocation. Set up
your monthly budget by matching spending to revenue. Expenditures like house
rent, car, food and school fees which are necessary should be analyzed. Fixed
expenses always have the same value, unlike variable expenses, such as energy
and water bills, which change according to consumption. For your fixed
expenditure you can adjust so it does not exceed 50-60% of what you earn. You
should also set aside 10% to 20% of revenue every month and also set variable
cost reduction goals.
Get your priorities
right
If you do not learn how to control money am sorry it will
control you. What makes a budget get out of balance is spending far greater
than your income. So get your priorities right do away with the unnecessary
staffs and focus on the most present pressing needs. You are the father charismas
among your friends, every night when you go to the restaurant you pay the
bills. Drastically cut down superfluous shopping, sightseeing and travels till
your finances are back on its tracks.
Invest in financial
education
You must invest time
and money in financial education. To really learn about how to organize finances.
Read, study, and seek information about finance. There are many books,
magazines, newspapers, and websites out there to learn from. There are a number
of financial education courses and books dedicated to lay people in the area
today such as Accounting, Economics, and Administration which can teach you
about interest, inflation, investments and consumer psychology. You need to
know how to use it properly. What’s the point of earning money if you do not
know how to manage it wisely? Financial education is a great companion, it can
greatly help you build and preserve your assets. So never underestimate
financial education.
Habits are powerful
change the bad ones
Are you the type who is always parting, dining in
restaurants, going to the movies, and shopping every month? It time you and
your family need to make some spending adjustments and probably change some
habits. You can do things like cutting down on electricity usage, teaching your
family not to be wasteful and replacing paid programs with free for the time being.
You need to be very strict and discipline to achieve this fate.
Always adopt the habit
savings
Be wise like the ant who gathers in the dry seasons so as not
to go hungry when the floods come. It is an extremely important step in the
process of how to organize finances. Cultivate the habit of savings. It is the
capital reserve that allows the person to face emergency situations or seasonal
crises. Save 10% to 20% of your monthly revenue after paying off what you owe.
This will serve as an emergency fund for unexpected expenses such as health, car problems and other issues. You can do this by opening
a savings account at a bank near you.
Make scheduled
purchases
Once you have learned how to organize finances, it does not
mean that you and your family members will no longer be able to buy what you
want. In fact, you have to evaluate whether the purchase is really needful and necessary.
Stick to plan and budget, buy what you need, your decision should be rational
rather than emotional. In doing so you will not overspend your budget.
Start to invest
Everyone has financial needs and we all set goals to achieve them,
maybe you want to buy a car, rent marry, buy or build a house or planning for retirement.
All these are achievable through investment. After you pay off your debts,
reach a balanced budget, and seek financial education skills, this the time to make your money work for you. You have to
consider investing a portion of your income. Search for investments according
to your profile. To do this, ask the help of your bank manager or anyone you
know who has knowledge and experience in the financial sector, get help from
companies specialized in providing such advice and choose from several products
available on the financial market.
Watch your credit card
usage
Do you know that interest rates have skyrocketed nowadays? With
credit cards, borrowing is simply as ABC. You can easily borrow to pay or buy
almost anything from restaurant meals, groceries, clothes, household goods, spa
treatments, cars, education and, of course, get a home. Having easy credit does
not mean that you should use it at all times, including it as a supplement to
your budget. Using easy credit as part of your usual income is one of the
biggest pitfalls to personal finance.
To be financially
organized you need to be disciplined
You want to achieve financial freedom it will take self-discipline
and sacrifice. For you to achieve all we have mentioned early you need to do it
with all religiosity. Discipline is hard work, temptations may come and they
will be very frequent so be strong and courageous and stay focused on the set a
gender.
