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I have a great contributed post for you today on why you need better money skills. Let us know what you think in the comments.
Be completely honest. When was the last time you sat down with a pen and paper and a calculator and took a good look at your finances? If you can put your hand on your heart and say that you’ve done this in the last week or month then fine.
However, if it’s been months or even years, it’s highly likely that your finances are overdue a health check. Most of us don’t enjoy checking balances and looking at statements and bills, but if you can get to grips with your finances now, this will benefit you in the future.
If you’re not quite as careful with your cash as you could be, here are some tips to help you be more organized.
If you’re one of those people that pile statements high on your desk or avoid checking your balance online, it’s time to make some changes. Being an ostrich and burying your head in the sand can have incredibly negative consequences.
Grab some paper and a pen or open up a new spreadsheet on your tablet or laptop and check every single account you have. Write down figures and have a look through your statements.
Once you’ve done this, note down any other debts you have, for example, loans. When you’ve got everything written down, you should be able to get an accurate picture of your finances.
If the news is bleak and you have less money than you thought or your debts are more substantial than anticipated, the sooner you can take action, the better. Ignoring statements and bills won’t make them go away, so it’s best to tackle problems head-on.
If you’re in debt, the sooner you can try and clear it, the better. It’s not easy to pay off credit cards or keep up with loan repayments, especially if you’re struggling to get from one month to the next, but it’s essential to try and pay off as much debt as possible before spending money on other things.
The trouble with getting into debt is that it’s easy to slide down a slippery slope. Owing money usually involves incurring interest, and before you know it, you may owe much more than the initial amount you borrowed or spent. If you have credit cards, and you’re paying interest, pay these off as quickly as you can.
If you feel like you’ve lost control of spending and you’re finding it hard to keep your head above water, seek advice. There are ways of getting out of debt, and it’s best to get help before you find yourself in a really difficult situation. If you’re missing payments or you’re anxious about finding money to cover bills, it may be possible to find a solution like debt consolidation. You can get in touch with a financial advisor or contact charities that are designed to provide guidance and support for those in debt.
Do you often check your balance and find that you’ve got less money than you thought? Do you find it hard to resist the temptation to keep your wallet in your pocket? Do you spend money without really thinking about it?
If you’re trying to save money or pay off debt, it’s really important to prioritize the essentials. If you’ve got bills to pay, make sure you pay them before you spend money on clothes, going out for a meal or taking a trip. If you miss payments or fall behind with bills, this can affect your credit rating, and it may also subject you to fines and fees. If you find it hard to stay on top of your spending, start making a budget.
Budgeting is a really quick, simple and effective way to take control over your finances. With a budget in place, you can ensure you have an accurate idea of how much money you’ve got and where you need to allocate your funds every month.
Start by working out what expenses you need to cover, for example, rent or your mortgage, bills and costs such as gas or a train pass. Then write down one-off costs you expect to encounter that month, for example, traveling to a wedding and buying a gift. Now, write down what you’ve got coming in from your wages and any other sources, such as state benefits.
Once you’ve done the additions and subtractions, you’ll have a figure, which tells you how much disposable income you have. If you know exactly how much you’ve got available, this will enable you to plan accordingly and reduce the risk of overspending.
Once you’ve done your budget, keep updating it as you go and check your balances on a regular basis.
If you’ve checked your accounts, and the balances don’t make for pleasant reading, there are many ways you can try and reduce spending. Often, we pay too much or waste money without even realizing, and even the simplest changes can make all the difference come the end of the month.
Think about how much you spend on electricity, commuting or groceries. It’s almost always possible to lower these costs by being a little more careful with your money. Try and decrease the amount of energy you use by avoiding leaving taps running, lights on and appliances on standby. Use a smart meter to track your usage and switch traditional bulbs and older appliances for modern, energy-efficient alternatives.
When you’re doing a weekly food shop, make a list and stick to it, avoid buying non-essentials just because they’re on offer, and look out for deals later in the day. Make use of your freezer and if you can’t resist temptation, shop online rather than going to the store.
With commuting costs, you can save money by walking or cycling if your workplace is around the corner or buying monthly or weekly tram, train or subway passes. You could also consider sharing lifts with colleagues if you drive.
It’s also a really good idea to spend an afternoon comparing prices on electricity, cell phones, TV and broadband and insurance. Log on, put in your details and have a look at different providers. Often, switching makes much better financial sense than renewing an existing policy or contract. If you have health insurance, for example, explore your options before you sign on the dotted line or automatically renew your policy. If you’re adding to an existing Medicare agreement and you’re searching for a supplement plan, click here for GoMedigap details.
If your car insurance is due, put the registration details in and look at prices from different companies. You may find that you could save hundreds of dollars per year. The same rules apply for your cell phone, your broadband and any other insurance policies you have.
It takes a few minutes to compare prices, and if you make a saving on every item, you’ll end up with a lot more money in your back pocket.
Most of us would like to have more money. If you’re keen to boost your balance and you already work full-time, you may be looking at ways your money could work harder. You might be considering investing in a venture or finding ways to earn more interest on your cash.
If you’ve got money set aside and you’re looking for a savings account, use the Internet to look at different accounts and keep a close eye on the interest rate. You may find that some banks offer a better rate than others. If you’ve got savings and you want to invest your money, there are various options available. You could put your money into a business, buy property or consider options like stocks and shares.
Whatever interests you, it’s always advisable to talk to people who have knowledge in that particular area. You should never go into an investment in the dark. Sometimes, you have to take risks, but these risks should always be calculated risks. If you’re buying a house, for example, research the location carefully, learn more about the rental market and consider the type of property and your target market before you submit an offer. If you want to grow your money, but you don’t know where to start, it’s always beneficial to see a financial advisor and go through some options.
Do you use your card or withdraw money from an ATM without really giving it too much thought? Has it been weeks since you checked your account balance or months since you were brave enough to open your credit card statement?
If you’re not up to speed with your finances, it’s time to give them a long overdue health check. You may be pleasantly surprised, but you may also be faced with unwelcome news. If you’re keen to be more organized, now is the time to start.
Work out exactly what’s going on in your accounts, write down details of any debts and start trying to get back on track as quickly as possible. Look at ways you could reduce spending, make a budget and prioritize the essentials.
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