As someone who loves to shop, enjoys holidays and owns way too many shoes… managing finances is something that I have had to learn to do. For some of us this comes easily, for others, maybe not so easy. Here are a few tips that might help you manage your finances.
Seek advice for long term planning
There are many specialists who can assist you with developing your financial future. This is a vital step in managing your finances. Seek help with this by contacting your local bank or your accountant.
Process your expenses monthly
If you keep your expenses up to date you are more likely to have an idea of how much money you are spending. If you work for someone else they will appreciate you doing this monthly. If you work for yourself, this is critically important for cash flow reasons.
Create a budget
This seems like a dirty word for many people but it is imperative if you want to take control of your money. If this is hard for you, seek out the advice of a friend, planner or investment specialist. Don’t forget to allow money for treats for yourself so you don’t resent your budget!
Review your budget weekly
This is a great habit to form and you may like to create a spreadsheet and enter your income and expenses to keep a check on it.
Use Internet banking
This cheap, effective and reliable tool helps you understand your financial position 24 hours a day. You can pay bills online, transfer money and many other interesting things.
Change your credit cards to charge cards
If you can manage without a credit card, replace it with an Amex or similar charge card that you need to pay each month. This will help you avoid collecting debt and not repaying it immediately.
Keep a separate file for your tax receipts
To assist you at tax time, keep one file where you place all important receipts needed for your annual tax return. This will help your accountant and will save you some frustrations at the end of each financial year.
Estimate your yearly costs
Spend some time calculating every bill you have and then total that amount. Once you know your total liabilities for the year you can divide that by 12 for a monthly figure. This is the amount you should put away in an account each month just to pay your bills. It will help you in the long term too.
Write down every cent you spend for 30 days
This activity is very frightening as you get a great picture of where all your money goes! Get yourself a notepad and write it all down – every last cent. Then total it at the end of the month and you will see a picture of categories i.e. food, rent, social activity, clothing etc and then it will help you create a budget.
Set up a receipts filing system
This will help you if you ever need to find anything in a hurry. It doesn’t have to be complicated and could just be in alphabetical order. Find a system that you will use and stick to it.
Have a small limit on your credit card
If you like to shop or spend money it may help if you have your credit card limit dropped and only have a small one to avoid spending too much money.
Get to know your accountant
If you don’t have one, get one. You need to feel comfortable with them and able to ask them lots of questions (without incurring huge fees).
Complete your taxes every year
Don’t get behind on this activity. Even though it is not the most enjoyable part of each year, keeping it up to date will make your life easier.
Enjoy your money
Make sure you allow money to have fun, go out, and do things you want to do. Life is too short to waste.
