When we plan our spending and establish our financial objectives, we do it with the best of intentions; yet, sometimes, life gets in the way and causes us to deviate from our plans. You run the risk of losing track of where your money is going and the goals you have set for your finances if you don’t have a well-organized system.
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If you live within your means, pay your bills on time, and work towards achieving your financial goals, becoming more organized with your money can help you do all of those things. The following is a list of six ways to organize your family money.
Look At Your Budget Monthly
You need to figure out whether your spending is in line with your income. Therefore, it is important to look at your budget on a monthly basis.
If you have gone over your budget, you need to reduce your spending and readjust your goals accordingly. For instance, if you spend on new shoes, you could try to save money by preparing more of your meals at home or going on a picnic instead of eating out at restaurants during the school holidays.
If you haven’t got a budget in place, you should really think about getting one set up. It may seem like a hassle; however, once it’s in place, it’s much easier to see where your money is going each month.
The 50/30/20 rule is one example of a type of budget that is popular with families because it can be modified easily. Other types of budgets include zero-based budgeting, which provides an extremely structured budget. If you haven’t done a budget before, then a really structured budget might make you feel a little restricted.
Automate Your Savings
Before you go out shopping or to dinner with friends, you should make sure that you have sufficient funds in your savings and investment accounts by paying yourself first. Establish a pattern of saving by programming your bank account to place a predetermined amount of money from each paycheck in a separate savings account in addition to an emergency fund. You might want to put this money in a savings account that earns a high-interest rate.
In addition, financial advisors recommend putting away at least 15 per cent of your salary before taxes into a retirement plan and, if possible, taking advantage of an employer contribution match. Part of your retirement plan may include investing. Have a look at Michele Tecchia for some inspiration for investments in real estate.
Have A Payday Routine
Maintaining financial discipline can be aided by establishing a regular payday pattern. That way, each time you get paid, you can put that money towards improving your financial situation.
Methods to establish a regular pay cycle are outlined below.
- Set aside a certain amount of time per week, say 15 minutes, when you get paid. Have your financial records close at hand as you go about your daily activities.
- Be that the money you were supposed to get via direct deposit actually ended up there. Compare your real income with what you had anticipated making.
- Verify that the money was successfully transferred to your savings account.
- Put your money where it belongs by using a budget.
Set Aside Money For Spending
If you pay for everything from rent and utilities to food and entertainment out of a single checking account, you may find it difficult to maintain financial discipline.
Your direct deposit may be divided across two accounts if your company permits it. Housing payments, bills, retirement savings, and necessities like groceries may all be paid from the same account. Your extra spending money will be kept in a separate account. It’s like giving yourself an allowance to put money away in this account.
Another option is to use a credit card that offers rewards for dining out and going to the movies. Balance alerts might help you stick to your spending plan and pay off your card in full before the grace period ends to avoid paying interest.
Get On Top Of Your Bills
It’s easy to get behind on payments if you don’t have a system in place, but that can have serious repercussions. A missed credit card payment, even if it doesn’t show up on your report, can add stress to your life and your finances.
If you want to pay your bills more efficiently, try these steps:
- Include everything from monthly subscriptions and interest on debt to your monthly electricity payments in one master list. Next to each provider’s name, jot down the payment due date and the normal monthly payment.
- You can save time and effort by using the bill payment service provided by your bank or credit union. In most cases, you have the option of either making a one-time payment or enrolling in an automatic payment plan.
- Make sure you have the money on hand to pay your bills on time by setting up calendar alerts on your phone or another device.
- Establish a sinking fund and set aside money periodically during the year to pay for one-off costs like renewing your car registration.
- Construct a strategy for handling debt.
- High-interest debt can be a major roadblock on the path to financial freedom. Getting out of debt sooner can help you save money and build your wealth.
Get more organized with your debts with these tips:
- Include everything from outstanding balances on credit cards and personal loans to those on your home, car loan, and student loan.
- Put the total amount owed, the interest rate, the minimum payment, and the due date for each obligation on a separate line.
- Pay the bare minimum on all your debts and prioritise paying off the one with the highest interest rate. Where do you even begin? Both the debt snowball and the debt avalanche methods include starting with the smallest balance and working up to the largest. To keep yourself motivated, you can also try “gamifying” the process of paying off debt.
These tips should help you to get in control of your family finances. Do you use any other methods? We’d love to hear them in the comments below.
