Some people might argue that getting financially organized is similar to living a healthy lifestyle.
We all know what it takes to stay healthy; eating right, regular exercise, and avoiding stress. Yet, it is an entirely different challenge to actually do something about it.
An important part of keeping your personal finances in good shape and getting yourself out of debt is organizing your finances. In order to get the most out of your money, you’ll need to have your finances in order.
An unorganized financial life can easily lead to problems, like unnecessary debts or fees, slow growth due to a lack of direction, and missed opportunities.
The following steps will help you stay on top of your financial life and save you money in the long run.
1. Use a Budget as a Tool
The absolute best way to achieve an organized financial life is to utilize a budget every day. If you want a way to look ahead and stay on top of what is owed, then a budget is essential. You also need a budget to help you achieve your financial goals, both short and long-term.
What if you don't have a budget? Create one today. Start by writing down your expenses the way you expect them to unfold. At the end of the month, tweak the budget by recording your real expenses. That process alone could surprise you and help you use your money smarter.
2. Set Up Money Reminders or Automate Bill Payments
Once you know what bills you have to pay, you’ll be in a better position to stay on top of your payments. A way you can streamline and simplify the bill-paying process is to set up money reminders for yourself.
Make a checklist for all the bills you are expecting and make a note of all your payment dates. Once you’ve itemized your billing dates, use an agenda, a wall calendar, your smartphone’s calendar alerts, a smartphone app, Google calendar notifications, or a desktop calendar to set up an alert to remind you of an upcoming bill payment.
3. Track your Spending
A big part of being organized financially involves knowing where your money is going . If you don’t know how you are spending your money, it’s virtually impossible to manage it effectively.
If you haven’t tracked your expenses in the past, you may be surprised when you see how your money is actually being used. Knowing exactly how much you are spending on different things will probably help you to easily identify a few areas where you could cut back and have a big impact.
4. Save Money
Squirrelling money away not only gives us peace of mind, but it also ensures that we’ll have something to fall back on in a financial pinch. Financial emergencies, a job loss, an illness, major vehicle or home repair, any of these can strike at any time, and during these moments, having cash on hand can prevent us from resorting to credit and racking up debt.
Many people who don’t have savings will use the excuse that they don’t have the money to do so, yet will actually be spending their disposable income on things they don’t really need. If you’re serious about organising your finances, making savings a fixed, non-negotiable expense similar to your regular bills is worth doing.
Keeping your financial life in order will take a little bit of effort, but in the long run, it will actually simplify things. Once you are organized, you’ll spend less time on financial tasks, and you’ll get better use out of your money.
If you need to improve the organization in your own financial life, be sure to work through the steps covered in this article and I’m confident that you’ll see results.