It is a truth, universally acknowledged, that money problems destroy personal happiness. The key to being confident about household finances is to get organized – something most people find relatively easy when they know how. After all, going to the mall with a shopping list is more efficient than just turning up and wandering around trying to figure out what to get. In the same way, taking a few simple steps to stay in control of personal finances is vital; it minimizes the risk of debt and ensures peace of mind.
Streamline bank accounts
A lot of folks have accounts in different places: they need to ask themselves, is it really necessary to have a credit card for the gas station and a different one to use online? Why have one account with a bank that has low fees and another at a bank that gives cash back? How many store cards do I really need? A person can make a great start to organizing finances by going online and reducing the number of accounts they hold.
In the same way, seeking out a bank that can provide a checking account as well as savings accounts and credit cards will bring several financial operations under the same roof, making it easier to manage finances. Online bank accounts make it simpler to keep track of payments and earnings, and this is much more straightforward if different investments, savings and checking information are available in one location.
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Develop a system
Some people like to use a software program to help them monitor and track their finances; this can be a useful option for those who are keen to view their financial summaries onscreen; however there’s still a need to sort out the paperwork and that is where lots of people stress about being out of control. The trick is to categorize documents and store them so they’re easy to find and to retrieve. A few minutes doing this every month will take the pain out of a major chore at the end of a year.
Investing in some folders and a small filing cabinet is ideal. Use colored folders or differently colored labels so bills, statements and other documents can be quickly located. If bills received are mostly electronic, set up a series of folders on a computer – one for bills, one for investments, one for credit card debts, for example. Regularly storing incoming invoices, receipts and statements helps keep things in order.
Create a schedule
Now that bank accounts are amalgamated and simplified, documentation is sorted and correctly filed, what’s the final part of the plan to put in place for an organized financial life? The answer is a mechanism that will deliver prompt payments and other actions, helping people to avoid last-minute panics. Using a diary, real or virtual, to record when bills are due helps prevent falling behind with payments and incurring penalty charges. Virtual calendars can be programmed to send reminders and alarms; a good old-fashioned red pen on a hardcover diary will serve to remind when payments should be made. Either way is good, as long as it does the trick.
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.