When it comes to “money matters,” a lot of people view
finances as complicated. In some ways, they are. Knowing the right investment
strategy to choose, for example, isn’t something that comes easily to
beginners. However, basic finances are just that- basic. The vast majority of
the average person’s
Organization is Key
To begin with, it’s pretty impossible to manage your
finances effectively if you don’t know where anything is. Most of the
information you’ll need to know, such as how much you made last year and how
much money you’ve got sitting in your bank account, can be found through
financial paperwork. So, make sure you have a safe, organized stashing place
for all that paperwork. Whether it’s a simple folder or a whole filing cabinet,
being able to access the documents you need is super important.
Minimize Your Accounts
There’s really no good reason for any person to
have more than one checking account or several types of one investment. If
you’ve got multiple accounts of the same type, you’re just making managing your
finances all the more difficult. To keep yourself from confusion and from
drowning under huge stacks of paperwork, cut back on your accounts as much as
possible, aiming to only have one (or two if you must) of each type of account.
Cut Costs
No one likes to think about cutting back on
their spending, but look at it this way: the more you cut back on spending, the
more you can increase your savings! Keep track of every dollar you spend, and
then, every so often- at least every six months or so- take a look at your log.
In fact, don’t just take a look at it. Go over it with a fine tooth comb,
taking note of the areas in which you’re spending more than you should be or
are just flat out wasting money. If you’re spending $300 in cable per month,
for example, but all you do is watch Netflix, that might be an expense you can
get rid of. Aim to get rid of at least one bad spending habit each time you go
through your budget; you’ll be shocked at just how much money this strategy can
save you per year!
Save Without Thinking
We all make promises to ourselves and set goals
for how much money we’re going to save. Unfortunately, setting goals and
actually seeing them through are two very different things. One way you can
help yourself to stick to your saving goals is to set up an automated savings
transfer. This simply involves having a set amount be taken from your checking
account and automatically put into your saving account on a set date, such as
your payday. If you do this, you’ll be saving money without even trying or
having to remind yourself to do it.
Think of the Future
Just as you need to be managing and simplifying
your finances now, you also need to be doing the same thing when it comes to
your future. Set up monthly, automatic contributions to your Roth IRA or
increase your 401(k) contributions. Even if you just increase your future
savings by a little, you’ll have a lot more to work with come retirement time,
making your life a lot easier.
You are the only person in control of your
finances, and, as you can see, you have a lot of options for taking that
control and making the most of it. Following these simple steps and seeking
help from a financial advisor can make your financial life a whole lot easier
and more manageable, which, in turn, can make your life in general a lot more
manageable.
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