Sometimes no matter how much we earn we still face some difficulties in taking care of our finances. Thankfully, if we follow simple advice things will turn out for the best. Here are 9 ways to keep track of your money.
- Setting up your bank accounts
A part of keeping your finances tidy is to have the right bank accounts and know what money each one of them has. It is very helpful to use different bank accounts for different things. For example, if someone rents an apartment from you it would be ideal to have an account that is used only to receive money from that person. If you have many sources of income and it is useless to have too many separate accounts you can categorize some sources into particular accounts and you can do the same thing for the things you have to pay.
- Check on your credit cards
Plastic money is very useful for daily transactions but it often makes us lose score. We don’t have a clear idea of what we spend and we are misled by the money we see in the pocket. A good idea is to check in with your finances every day. At least as long as it takes to understand where you are spending most of your money and what possible expenses you can reduce.
- Create emergency funds
Have you ever thought about what will happen in the case of an emergency in terms of the economical support you will be able to give to yourself and your family? This is why many people make savings called emergency funds which are also kept in a separate bank account.
- Check on the prices around you
Checking your expenses is a big deal and at some point, you will realize there are things you buy often and their price is unjustified. Perhaps they are overpriced or perhaps you don’t care to buy them for the value they provide. Cut down on these ones and you will be surprised by the improvement you will have.
- Income is half the road to improvement
Reducing the expense is an idea, however, the optimal thing to do is think about your income wisely. Many people believe their salary is all they can ever get but there are so many more options out there. You don’t have to be a businessman to make an investment and it doesn’t have to be something big. Check with your banks to see what they can offer and move forward as soon as possible.
- What about debts?
Most Americans owe money to the banks. We suggest you don’t take a loan to buy a new car or anything fancy and you only use this method for investments including college which is considered to be an investment. If you have unpaid debts, start paying them down and do not take a loan to pay another dept because this will create further problems.
- Be wise with insurance
A big part of the monthly expenses goes to insurance and it is important to make sure you have made research before selecting the best one for you. Even if you have ended up with what suits you best it would be good to keep being updated since it is a very competitive market and you can make a better deal in the future.
- Set long-term goals
Setting goals will help you gain motivation over saving money and making money. Set a financial plan and think about the things you want to do with this money. If you don’t have a vision you will not have the motivation to be consistent with your choices.
- Have a budget
Having a budget is a part of the plan. It is the way to manage your finances short-term and trust us it is necessary. Determining your budget is a good start to become smart with your money. After your write down everything that goes inside and outside of your pocket every month, you will set your financial plan. Once you know what you have and what you want to achieve you can go ahead and see what your monthly expenses should be and make your budget.