Getting your personal finances in order saves time, reduces stress, and grows your disposable income. We’ve put together the five most essential tips for you to follow when doing your finances, so you can invest a little time and enjoy a decent financial reward.
1. Track Your Spending
Knowing what you spend your money on is the first step toward curbing spending. There are plenty of apps out there that can help you track spending. Our favourites include Mint, Goodbudget and YNAB (You Need a Budget).
When you start tracking your spending, you’ll be shocked to see how much you spend on a particular area – whether it be food, entertainment, or hobbies. You’ll identify areas of your life where you are unnecessarily spending too much and can then start reducing spending in these areas.
2. Pay Yourself from Every Pay Cheque
“Most people I talk to don’t pay themselves from their pay cheque,” says Rob Colville, CEO and Founder of The Lazy Trader. “They’ll pay rent, set money aside for food and transport, and then in most cases, spend the rest. Consider taking 10-15% of every bit of income you earn and locking it away in an untouchable account. You’ll notice this fund grows at a substantial rate”.
3. Automate Bills
Managing your time and automating your regular bills is an essential part of personal finances. You’ll know what to expect to pay, you’ll be able to track your bill payments, and you’ll never miss a payment or get an unexpected surprise. You’ll save money in the long run, as you’ll never incur a late payment fee or anything unpleasant.
4. Regularly search for better deals
Becoming complacent with current providers, such as car insurance, electricity, mobile provider and internet connections, can eat into your money.
There are frequently new offers on the market, often offering better services for lower, more competitive prices. Once a quarter, or perhaps twice a year, it’s a great idea to search for new offers to either switch to or discuss with your current provider to get better prices. Google “online comparison sites” in your area to find better prices for the services you need.
5. Don’t use credit cards
Too many people have too many credit cards. A store card, a backup credit card, and perhaps even a travel credit card will keep your personal finances small. You’ll inevitably incur unnecessary fees, and you’ll also have access to credit that you might not need and probably shouldn’t be using.
Being honest with yourself and your spending ability is essential to living within your means and to building your personal finances.
Hopefully, the tips we’ve included here can help you start building your personal wealth and better manage your personal finances.