Author: Geo Walsh
You must have a huge financial muscle so that you will be able to carry your financial burdens. However, managing your finances can become tricky even for salaried workers with predictable monthly expenses, but you don’t have to worry.
Here are four easy steps to help you manage your finances effortlessly.
1. Get on a Budget
You need a budget. A budget can make or break your finances. Budgeting is the estimate of revenue and expenses over a particular period of time.
Having a budget allows you to keep yourself in check to avoid overspending.
Below are four essential elements needed to manage your finance responsibly.
- Income: This is where the money for the budget comes from. You must keep track of how much you earn and from which sources.
- Fixed expenses: These include feeding and mortgage, subscription, and other related household and family needs.
- Flexible expense: Flexible expenses are costs incurred for clothes, tv subscriptions, and related items or services.
- Unplanned expenses and savings: These are money prepared for unexpected situations or emergencies. For example, medications or repair bills.
There are several ways you can budget your money. You can write your budget by hand on paper, use a spreadsheet, or use budgeting apps.
2. Automate your Bills
Many of us have specific bills that cost us a fixed amount every month. These bills include rent, cable, car payment, mortgage, etc..
Auto paying these bills can save you an incredible amount of time in the long run. More importantly, paying your bills automatically reduces your chances of being late on your payment, which may damage your credit score.
According to a credit card expert, Beverly Harzog, late payment on bills (even utilities and cell phones) can get reported to the credit bureaus, and lead to a negative effect on credit score”.
3. Consolidate your Debt
People often struggle to keep tabs when they owe money on different cards. They might even forget to make the minimum payments to service their debt.
So consolidating your debt is a good idea because you can move your various balances from different cards to a single card.
Consolidating your debts not only helps you stay organized but allows you to spend little or no money on interest.
You could simply transfer your various balances from different cards to a single card with a 0% introductory APR. This means you can pay what you owe with 0% interest
4. Go Paperless
Having multiple accounts may lead to lots of paperwork piling up around your home. Most times, many of us don’t even have the time to check out these papers because of stressful daily activities.
Therefore, it is advisable to move your account statement from the traditional way (paperwork) to online notifications.
This will help you to accurately and conveniently manage your account. Furthermore, digitally storing your bank and credit card statements will make storage and access very easy.
Final Thoughts
Building and managing good financial muscles can be hard at first because of the practices involved. However, the tactics mentioned in this article can help you to build and manage your financial life perfectly.