I’m in full gear for spring cleaning! This month I’m focusing on cleaning up and organizing our finances. Today’s guest post is the first of many about this topic.
Every aspect of our lives is bound to get a little disheveled at one point or another. Whether it’s the house, car, or your finances, a little deep cleaning action couldn’t hurt. With the New Year in full gear and tax season just around the corner, don’t you think it’s a good time to organize your financial life? Here are a few steps that may help.
- Make a Budget: If you don’t have one already, make a budget! It’s crucial to getting your finances in order. You can make a simple spreadsheet that lists your income – expenses, or you can go the modern route and download a budgeting app. Whatever the method, make sure it’s a budget that is reasonable in which you can stick to for consecutive months.
- Understand Your Needs: Too often, we confuse our needs with our wants. Consider giving up your monthly cable subscription in order to save some extra money. Or choose at-home workouts instead of that costly gym membership. When you give up those unnecessary wants, you’ll find that you can allocate your money toward something you really need. Save your small, insignificant wants for something bigger and better.
- Start Saving: If you have money left over after you’ve completed your budget, then use the excess as saving cash. Don’t spend it! Move that money over to a separate savings account where you won’t spend it on a whim.
- Consider Cash: As convenient as debit cards have become, it makes spending a little reckless. If you only use cash, then you’ll be more careful about where your money is going. Automatic bill payments may be hard to pay with anything other than your card, but things like grocery shopping and entertainment expenses can be paid for with cash. Once you run out for the month, you’re done till the first rolls around.
- Know Your Debts: It’s important to know exactly how much you owe to student loans, car loans, and credit card companies. Keep these numbers in one document where you can look at them easily. If you don’t have a plan to get out of debt already in place, it’s time to come up with one. Usually you’ll pay the smaller accounts down first, and then when those are paid off, you’ll tack that money you would’ve spent onto the next smallest account.
- Look To Invest: Whether it’s an income property, the stock market, or an IRA, do some studying up on investments. If you have money you’re able to save each month, it would be wise to have that money work for you instead of just sit there.
- Plan for the Future: We all have our goals and aspirations, and sometimes they can get expensive. If you have kids, it would be great to start a savings account for each of them. Or if you’ve been wanting to take that trip to Europe, you’ll need your savings plan set in place. You can reach these goals when your financial life is organized!
- Give Freely: If you’re in a financially stable place to help others out, don’t hesitate. There are plenty of charities you can give to, even if it’s a seemingly small amount. Alternatively, be charitable to those you know, especially close friends and family. I’m a firm believer in karma, and a little financial help to someone in need goes a long way.
Getting our financial lives in order doesn’t have to be a headache and a half. Sure it takes a little planning and dedication, but once you get going, you’ll see how much better off you are. You’ll find peace of mind and purpose. Here’s to making 2015 a financially organized one!
Madison is a Community Relations Specialist at Cougar Mountain Software. She majored in Business at BYU-Idaho and enjoys sewing, marketing, and fashion illustration. While these hobbies can get somewhat expensive, she’s a firm believer in saving money and sticking to a budget.
What are your favorite ways to organize your financial life?