Managing your finances can be somewhat of a challenge, especially for those who have never paid attention to spending habits, income, and other financial statements in the past. But, using the right tools, and taking simple steps to improving spending and cash allocation, you will find it is not impossible to manage, know what you have, and always be in control of your finances and your spending.
Know what you have
You always want to be aware of your income, expenses, and financial risk. One thing you can do is try using some easy access savings accounts; not only do you have instant access to cash when you need it, but easy access savings accounts provide flexibility. Knowing where you are over spending, how much you have available to you, and what you can (and can’t) spend, will make it much easier to manage your balances and accounts.
Creating financial documents, via spreadsheets or other ledgers, is an easy way to keep track of finances. Have columns for spending, income, debts, risk, leisure, and so forth. Everything you spend, and everything you deposit should be accounted for. Not only will this help you see what you have, and how much you can spend, it will also help you think twice before foolish spending on something you don’t need, or can’t afford.
Know what your credit report says
If you use credit cards, know what your report says about you. The higher your score, the more financially sound you are, and the more risk averse you are. This bodes well if you ever have to borrow in the future, or if you are planning on making a big purchase, and possibly need a loan. Track and consistently monitor your credit score, as it is a big part of your life, and future endeavors.
Know what accounts are best
If you have savings, CD accounts, 401 K, or other forms of savings, know what each does, and what benefit each one produces. Try to invest in tax deferred accounts, and those you pay the least amount of taxes in. Also know where you will get the most back.
Knowing what you have, and what you don’t have, is the starting point to creating financial balance in your life.