Everyone juggles roles. From spouse to parent, from employee to boss, switching from one task to another effortlessly is the key to happiness. But there’s one area of life where even the best of us often struggle to excel, and that’s personal finance management.
When you’re already tackling pressures from all corners of your life, piling bills and confusing investment options can easily lead to frustrations. Though it may seem impossible, more of than not, all it needs is a little planning and a bit of organization to sort things out. With practice, you can even become a master at managing your finances.
On that note, let’s take a look at a few pointers which can help you understand personal finance management better.
Determine your net-worth
Determining net-worth is a pretty straightforward calculation. Simply subtract your liabilities from your assets. Your net-worth is an indication of your financial status, and it gives you insights to plan your future expenses. If you do this activity yearly, you may get into the habit of spending wisely and saving at the same time.
Monthly budget analysis
For most of us, every month is different in terms of expenses; however, there isn’t a considerable variation. You need to keep track of your regular recurring costs and evaluate your monthly budget regularly.
Maintaining a list of your set as well as variable utility bills is also recommended. By keeping such checklists, you might spot areas of adjustment. Cutting down on a particular expense and adjusting it to pay another may be a smart idea.
Make the best of financial apps
Technology has given us some handy apps to tackle personal finances. Generally, to work with such apps, all you need to do is enter a few details and just get started. It is recommended that you look for authentic applications that are secure enough, and that can help you plan your finances better.
Store your bills safely
These days, most statements and invoices are received electronically, and thus, it’s quite manageable to store them on the phone or laptop. You should maintain a folder of all your bills for future reference. Many bills like property tax, insurance, etc. are an annual affair, but it is common to miss them. Hence, you should keep a separate folder for all such bills.
Investment accounts simplification
Many of us have multiple bank accounts that are spread across different banks. Brokerage, mortgage, investment, personal, etc., there could be several accounts in your name.
As such, you’d have to maintain all the ID’s and passwords, passbooks, and checkbooks. It is preferable to eradicate the confusion by consolidating all accounts to a single bank.
If you’re in control of your finances, you can live economically. But, don’t make it overly stressful for yourself. The financial to-dos mentioned above might lay a good foundation for you to have better budgeting years ahead.