When it comes to matters of money, it can be difficult to know where to start. Everyone wants to make sure they are in a sound financial place. Money problems, or at the very least, the prospect of money problems can have a long lasting impact on your household. Whether you are single, a couple or have a growing family, having a sound grasp of your finances is imperative for now and for the future.
When it comes to matters regarding money, many people feel scared by the prospect of analysing their monthly incomings and outgoings. But, by taking stock of your finances and ensuring that you are managing your budget, you can be in a great place to start living.
After all, if you are working hard all month, you want something to show for it other than a pile of bills. You should certainly strive to have more money at the end of the month and a little put aside for rainy days.
So, if you are keen to manage your household budget in a more robust way, you are in a great place to ensure that this dream is a reality.
The Importance of Managing Your Finances
For those in the know; having a grasp of your finances means that you can start living a happy life. Financial problems can cause untold misery. Not knowing how you are going to pay for basic necessities can be a burden to even the strongest of people. Managing your money in a more robust ways that you are stressed less and you can start enjoying your free time. Work to live, don’t live to work. Managing your finances is important so that you can achieve your own personal goals.
Planning a Monthly Budget
When it comes to managing money, the best way to do this is on a monthly basis. Take your income and see what incomings and outgoings you have. You can ensure that you remain right on track. What’s more, you can make sure that you have a small nest egg put aside. You don’t have to be at the behest of late payments and financial security. You need to start putting your finances into order on a monthly basis.
Step 1: What Are Your Needs?
Financial planning is a deeply personal and unique endeavour. There is no one size fits all solution to money management. You need to assess your needs and make sure that the contents of your planner are completely tailored to your personal finances. This means that you cannot cheat. You cannot omit your weekly visit to the pub or cinema. Be completely honest and ensure that you are using a planner to its full potential.
Make sure that you detail the information of your utilities provider and ways that you can contact them. This will prove to be a great advantage if you need to reduce payments, increase your bills or set up a payment plan.
There is a wealth of online tools that you can use. Or, you can compile your own handy customised spreadsheet.
Step 2: The Essentials – Tracking Your Finances
So, now you have your planner in place it’s time to start assessing your finances in a basic way. You need to make sure that you are covering the essential items that you pay. Typically, these can be broken down into things like mortgage, rent, utilities and car payments. These are the basic necessities that many pay.
Once you have detailed these in your amazing swanky new planner, you need to make sure that you are estimating the amounts that you pay. This can be difficult, especially for fuel bills, but having a close estimate is as good as actual figures. Of course, some bills are more concrete than others, so do ensure that you are including actual figures where possible.
Endeavour to record the following information as a starting point:
- List Your Bills
- Company or Provider
- Contact Information
- Value of Bill
- Due Date
Should you think that there is other pertinent information to include, then by all means add it to the planner. After all, this is your planner, so do what is best to help you manage your money.
Step 3: Diligence and Awareness
Monthly planning and budgeting is only as successful as it is accurate. You need to ensure that you are being honest when it comes to your bills. Include all information, including leisure pursuits. Make sure that you are recording payments as and when they are paid. One of the best ways to make sure that your financial planning is working is to check your bank statements against your planner.
Step 4: Now, It’s Time to Be Honest – Record Every Financial Transaction
Okay, so you don’t have to record the chocolate bar that you picked up from the shop, but having a basic grasp of major outgoings in helpful. Record how much you spend on groceries, birthdays, petrol, insurance and travel. If you have loans and debts, you need to consider how much you are spending on these. If the amount is unmanageable and you cannot record and track your debts in a sustainable way, you need to seek the services of a debt management company. Debt consolidation loans are a great way of managing your finances and ensuring that you can control your household budget in a more systematic way. After all, if you are paying debtors at all times of the month, it can be a complicated process when it comes to financial affairs. With this in mind, you need to be proactive and not reactive when it comes to debts. If you feel that you cannot cope with spiralling or mounting costs, seek advice and make sure that you take out a debt consolidation loan to help you manage your cash with ease.
Step 5: Curb Your Spending, Not Your Enthusiasm
Yes, the thought of curbing your spending can feel like a difficult task. We all want to splurge and treat ourselves every now and then. But, think of the dire financial consequences that can occur from splurging too often.
Take a look at your planner. What would you consider to be a drain on your income? Are your bills too high? Are you managing your debt properly? Have you got a savings account?
Once you have taken the helm of your finances you are in a great place to control what happens next. Manage your money for the long term and live happily ever after.