Organizing Your Personal Finances for the Best Results

Organizing Your Personal Finances for the Best Results
Imagine trying to locate a specific piece of paper or receipt on a desk—but the desk is filled with dozens, or hundreds, of other documents. It’d be quite a hassle to sift through the pile, desperately looking for the single piece of paper you’re seeking. Sure, you’d feel triumphant when (or if) you finally found it, but you’d also have wasted too much precious time on the unnecessarily complicated task.

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That’s exactly how dealing with personal finances starts to feel without a system in place to keep things organized. Suddenly, keeping track of income and expenditures becomes a chore. 

You might start to play the not-so-fun guessing game called “Do I have enough money in my checking account to afford this transaction?” If you fall behind on payments, you’ll start receiving letters and calls from creditors urgently demanding reimbursement.

In short, personal finance can become a stressful mess. But it can also be relatively simple and routine—for those willing to take the time up front to organize their approach to money management for the best results.

Budget Your Way for Best Results

Everyone is different. But traditional approaches to budgeting feel very one-size-fits-all. It’s easy to see why people trail off or becoming discouraged before even starting when their brains simply respond differently. The key is budgeting your way, whatever that is. Find a system that makes sense to you and motivates you to stick with it continuously.

Some people enjoy the old-school approach of keeping manual tabs on incoming and outgoing funds, either on paper or on a spreadsheet. Others operate well using the modern approach: logging financial progress on a budgeting app of their choice. Different people also prefer to check in at different intervals, either monthly, weekly or even daily. Some people thrive using a cash-only diet, while others use some combination of debt and credit cards.

Instead of struggling with a system that “should” work, find one that genuinely does. You’ll be a lot more apt to keep at it that way.

Tackle Your Debt—Large or Small

According to Merriam-Webster, to “get the monkey off one’s back” refers to solving a long-time problem that’s been causing difficulty. If you’ve carried the debt for any amount of time, it’s easy to envision it as a pesky monkey weighing you down as you try to journey through life. And only deciding to really tackle your debt will bring true relief from its consequences: stress, limited funds, diminishing credit, the threat of losing assets, etc.
How you address your debt depends on how much you have and what kind. Do-it-yourself debt repayment may work if you owe hundreds or just a few thousand; prioritizing debts in a chosen order by interest rate or balance amount usually helps consumers stick to a repayment plan.

If you’re one of the many Americans currently unsure how they’ll ever pay off their growing debts—and increasingly struggling to keep up with payments—negotiation may help alleviate some of the burdens. 

Did you know that creditors may be willing to play ball? Industry expert Andrew Housser co-founded Freedom Debt Relief, a settlement programs that help enrollees save up and negotiate, after hearing how his friend inadvertently negotiated with creditors to  settle a whopping $30,000 in debt for just $9,000.

You may be able to benefit from doing a balance transfer from a high-interest card to a low- or no- interest card, giving you relief from sky-high APR as you work on repayment. Or, you may be a good candidate for using a consolidation loan to wipe out multiple lines of credit, provided you can commit to repaying the loan back at a fixed rate over time.

Long story short, it’s very difficult to organize your personal finances with debt in the mix. Do whatever you can to address it proactively now.

Control Your Credit Card Usage

Credit cards aren’t inherently bad. They can bring rewards to faithful users, and they’re handy for building credit. But they can unleash a dangerous cycle of spending and owe.

So, strategize on how you use credit cards responsibly. Pay off the entire balance each month if possible. Always pay more than the minimum balance, or you’ll rack up serious interest. Keep monthly utilization around 25-30 percent of the total credit available to you rather than maxing out cards. And never, ever use credit cards as a substitute for savings.

These tips will at least get you started on the right track toward organizing your personal finances.

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