You want to stay on top of information concerning your investments, savings, expenses, and general income by checking them periodically. You want to do this to feel more confident with your financial situation and to motivate yourself to make better choices with your money going forward.
While going over your finances can feel like a tedious and boring task, the process can enhance your ability to make smart financial decisions and improve your well-being, reducing your daily stress.
The following are tips to help you organize your finances during these periods of time when you evaluate your situation.
- Utilize Found Money
Everyone has that one expense that they pay for each month that they rarely if ever use. These extra expenses are things like seldom-used gym memberships and phone lines. You’re basically throwing money away by keeping these services active. When you start dropping these unnecessary items, you’ll start to see your cash slowly add up. Start slowly by cutting one of these expenses and try cutting other expenses when you feel ready.
You can find extra cash in other places as well from raises, tax refunds, bonuses, or gifts. When you find this extra cash, determine where it would best fit in your financial plan. You can put this money in your retirement plan, college saving, or savings account dedicated to something else. Many people try to put at least 10% of their salary into their retirement plan, so putting any extra money in your account early can allow you to use your income for other interests.
Ultimately, you want to decide what to do with your saved money based on your financial situation. If you have debt to pay off, immediately address that. If you don’t then save it or treat yourself.
- Keep Track of Progress
The easiest way to keep track of your financial progress is to categorize specific goals. This will allow you a clearer outlook and allow you to be more optimistic when you look at the progress.
For example, if one of your goals is retirement, then determine how much you’ll need to make to get there. From there, list short- and long-term goals. When you’re evaluating your finances, check your progress on these goals to see if you’re on track. Even if you aren’t on track having it all planned out can allow you to see where you need to make adjustments.
Another way to keep up with the progress of your financial situation is to update information that is crucial. You want to make sure that your accounts and policies are all currents and ensure that you have the addresses of financial institutions and insurance companies.
You also want to make sure that you review beneficiary designations that you’ve created. Ensure that you’ve updated any name changes and other information. Once you’ve seen that it’s all up-to-date, simplify the process for your next financial analysis by keeping a dated copy.
- Consolidate as Much as Possible
Through your life and career, you could end up with multiple IRAs or 401(k)s from different places. Having a large number of accounts can make it difficult to keep track of your assets. To avoid any confusion, you should consolidate as much as you can to simplify your investment management. You can combine your IRAs into one entity under just one institution, and you can review whether or not you multiple 401(k)s.
Besides simplifying your investment accounts, you can also help your finances by simplifying your credit cards. If you have multiple credit cards, there’s a chance that you could have trouble keeping up with which one is which. It makes it harder to control your spending and track your budget. Evaluate which cards work best for you and narrow it down to just one or two. If you want, you can keep more for emergencies or limited use.
- Engage Family Members in Organizing Finances
Talking about and strategizing your finances with your family can foster a sense of unity while teaching your kids about financial responsibility. It can also help you get to your goals faster. You can also make it fun for your family by offering rewards to your children when they find an expense to cut. As they grow older, they’ll feel comfortable to discuss their goals with you, and you’ll be able to help them pursue them.
The Bottom Line
Organizing your finances can help you get an idea of where your money is going and to see where you can make changes. The key is to start small and work your way up. You can start by checking your ChexSystems report. What’s ChexSystems? You can find out all about it from https://aaacreditguide.com/chexsystems/.