It’s almost everyone’s goal to improve their finances, especially they’re working on improving their business. Having your finances in order can take a lot of pressure off you, and help you move forward with your goals. If you’re looking for ways to improve your finances, read on for 7 financial management tips that will help you get back on track.
7 Effective Financial Management Tips
1. Track your spending for a week
You’ll need to create a budget, but you won’t know what you’re aiming for if you don’t have a handle on how you spend right now. Spend a week tracking how you spend. Get a notebook, or a notebook app on your phone, and write down everything you spend over the week. Track everything, from bills to your weekly coffee from the local coffee shop.
When you do this, you’ll be amazed at how much you’re spending, and where you’re spending it. You’ll have the evidence that shows you where you’re spending too much, and so where you’ll need to cut back. Use this data to start making changes to how you budget and spend your cash.
When you do this, make sure that you’re not missing anything. Write down everything you spend, even if it’s only a dollar or two. It may only be a dollar, but it can add up quickly.
2. Make sure you’re saving
Many people don’t have savings as they feel they just don’t have the incoming cash to properly create a savings account. However, you’ll find that even if you feel as though you don’t have enough money, you’ll still find the disposable cash to buy things that you don’t really need.
Start a savings account now, and ensure that you’re paying into it on a regular basis. Even if you can only put a small amount in every week, that amount can add up over time. Let it build up, and you’ll soon have a good amount of cash to fall back on.
It’s a good idea to have savings, even if you have nothing in particular that you want to save for. If something breaks down or an emergency comes up, you’ll have the cash to fall back on when you need it.
3. Create a 3 category budget
Financial manager Betty M. Epling from Top Canadian Writers says, ‘When creating a budget, you don’t have to track everything you spend. It’s not helpful to try and cut back on everything at once.’ This is true, as you’ll find it harder to cut back on all of your spending all in one go. It’s like cutting back on anything, you’ll need to do it gradually in order to do it well.
The best way to create a budget is to pick three categories that you need to cut back on or change. For example, perhaps you want to change the way you spend on eating out, coffee, and clothes. Work on these three categories first, and you’ll be able to make gradual changes that will stick.
4. Pay your bills on time
This sounds so obvious, but paying your bills on time will save you an incredible amount of money in the long run. This is because you can be faced with late bills, even if you’re a day or so late with the payment. This happens often, even though in this day and age it’s easy to avoid this.
The best way to ensure your bills are paid on time is to set up direct debits for all your bills, and keep track of when the money should be going out. If you do this, you give yourself peace of mind that your bills are paid, and you’ll improve your credit score as you’ll be a regular payer.
5. Get a credit card, but use it wisely
Credit cards certainly aren’t the best way to borrow money, as they can be expensive to pay back if you don’t keep up with them. However, if you don’t have any other forms of credit on your history, it can actually be harder to get credit in the future as there’s no record of you paying anything regularly.
It can be a good idea to get a credit card and use it wisely, in order to build up your credit score. Try paying for one thing on it every month, and then paying the card off every month. It helps you build up your credit score, without running up bills.
6. Use budgeting tools
You don’t have to budget manually, as there’s so many apps and tools out there that will help you keep track of your money. First of all, take a look at what your bank offers you as a customer. Their online banking and apps can help you transfer money for savings and other necessities.
As well as this, take a look online and see what’s on offer for you. For example, many apps are designed to take a certain amount of money from your account every month and put it directly into your savings. Others will help you split bills with friends, when you share an expense like dinner. Take a look around and see what works for you.
7. Look into clearing your debts
Debts can be a real problem when you’re trying to budget, as they can eat a good amount of your cash every month. The best way to start building a budget is to pay off as much as you can each month. Try and pay over your minimum payments, especially on your credit cards. the quicker you can get them paid off, the better.
If you’re having more trouble, try talking to a debt charity or adviser. These experts will help you organize your finances, and create plans to organise your spending. They can help a lot when you need it.
These 7 financial management tips will help you get a handle on your finances and start creating a budget for yourself. Put them to good use, and you’ll be able to save cash right away.
Author: Jennifer Scott