The first step toward achieving better financial health is getting your finances in order. By doing so, you can avoid missed payments and unnecessary fees, start tackling debt, and embrace financial opportunities to pursue your savings goals. Organizing your financial life doesn't have to be difficult.
To help YOU take charge of your money, just follow these 7 simple steps:
Track Your Spending - Tracking your daily spending is a great way to determine where your money is going. Take a few minutes each day to enter your daily expenses in a pocket notebook, spreadsheet, or app on your smartphone.
Calculate Your Cash Flow - Cash flow is simply "money in" (income) and "money out" (expenses). Subtract your expenses from your income. The result is your monthly cash flow.
Create A Budget - Sticking to a budget can help you keep your spending in check and manage your money in a way that aligns with your goals and priorities.
Automate Savings And Bill Payments - Pay yourself first by setting up an automatic savings program. If your employer offers a 401(k) plan, this is an easy way to save for retirement by allowing you to contribute automatically to a 401(k) account. To better handle bill payments, automate them by using your banks' online bill pay or money transfer options.
Set Up A Filing System - An effective filing system will help keep your financial records organized. Where possible, "go paperless" so you receive and store documents electronically. Set up a file system for any paper bills and statements you receive in the mail and spend a few minutes organizing them each month.
Update Documents Periodically - Check your financial documents annually to make sure that all your personal information, including emergency contacts and beneficiaries, is accurate and up to date.
Set Financial Goals - Set specific, measurable financial goals, whether it's paying off debt, saving a specific amount each month for retirement, or reaching an important financial milestone.
Now that you know what steps to take, it's time to take action!