If you really want to get ahead in your finances today, you need to pay close attention to how you manage your money. Since getting ahead usually means bringing more money into the household than you have going out, you need a good system to help you to do just that.
Thankfully, there is a wealth of valuable financial information online that can assist you with devising a foolproof plan. A plan that will help you to map out your finances for the present and your future. Also, if you need a fresh start and a boost to achieve your goals and objectives, here are 5 ways to manage your finances.
1. Set up the right bank accounts
When you are setting up a new way to manage all of your income, you may want to start by setting up the right types of bank accounts. Here are 3 of the most common bank account types that help you in allocating and managing your income.
- Checking Account. You need a checking account for a number of reasons, including using this type of account to paying all of your monthly bills. You can use this account in at least one of two ways, and that is to pay bills by a physical check or electronic fund transfers.
- Savings Account. Unlike the checking account, the savings account is actually needed to put money aside versus transferring money out regularly. This is money that you do not spend on a day to day basis. Instead, a savings account can be used to save different sums for your child’s college education, save a down payment for a new home or car, and other essentials that will help you to enhance your financial life style.
- Emergency funds account. At some point in time, virtually everyone has an emergency that they cannot anticipate. Since these emergencies can occur at any time, this money needs to be stored away for that particular purpose. Simply put, you can use emergency funds to pay for a hospital bill, expensive car repairs and other things that can easily destroy your budget.
2. Take stock of your current financial situation
As you design your financial plan for the future, it is important that you take stock of your present financial situation first. Because some financial plans require you to be more frugal in spending, you need to know what types of expenses can be removed completely from your monthly expenses. For instance, if you are over your head in unnecessary credit card debt, you need a plan that will aggressively attack these problems. In some situations, this may mean cutting up one or more of your credit cards so that you can reduce and eliminate high interest credit card debt.
3. Make a plan for your money
Once you take stock of your present situation, you need to create a financial plan to distribute your weekly or monthly pay check in a strategic manner. The plan that you make can accomplish a wide variety of purposes including those listed below.
- Pay off all of your credit card debt
- Allocate your paycheck into different expenses. For instance, you need a plan that will provide you with enough money to take care of all expenses comfortably.
- Pay a specific amount for family entertainment
- Set aside a specific amount for eating out and preparing meals
- Pay a specific amount on your utilities
- Provide a clothing budget for you and your family
- Allow a certain dollar amount for your groceries and gas bill
- Set aside a specific range of money for paying the note on a new vehicle
4. Get a payday loan if you can’t cover your current expenses
Sometimes your paycheck will not cover all of the expenses that you owe at the end of the month. This is especially the case for those of you who have expenses that you did not anticipate. To address these financial issues right away, this may mean borrowing a loan til payday to cover the cost of all of your bills.
Before you borrow a loan, however, you need to know exactly how much additional money is needed. You need to also know when you can pay the money back to the lender. Once you have this information, you can shop around for a loan that offers the best interest rates and terms possible.
5. Check-in with your finances every day
Devising a budget to look at and manage your finances once a month is not considered to be the best money managing solution for most people today. In fact, if you really want to do a good job of managing your finances, you may need to check your financial status daily.
When you are checking these amounts on a daily basis, you will have an opportunity to keep expenses down. And, you will have an opportunity to monitor every penny that comes in and goes out before huge financial problems can occur.