Thursday, July 17, 2014, AM | Leave Comment
They say love makes the world go around, but we all know “they” are wrong: it’s money that does the real work. Since money is so important to our daily lives, keeping track of it is crucial for fiscal security.
Here are four financial considerations you would be wise not to ignore.
Fudging the numbers in your budget can be so easy; especially if you get down on yourself for any over-budget spending. It’s less painful to rip the band aid off quickly: pay the credit card bill the second you open it, without dwelling on the individual purchases.
Even if over-spending in the past hasn’t caused any big problems, sticking to your budget is a great habit to develop. It teaches you to spend in moderation and prioritize the things you do buy.
Keeping track of a budget is much easier than it used to be, so there’s no excuse not to do it. You don’t have to handwrite expenses and add them with a calculator—you can use software like Quicken or Mint.com. These software programs keep all financial accounts in one place, keep track of purchases made with each account, and divide them into a customized budget.
Although software can keep track of our expenses for you, try writing them all down by hand. When people want to improve their nutrition, experts tell them to write down everything they eat. Then they pay more attention to their habits and, ideally, start eating healthier.
Writing down your expenses uses the same idea but with your spending habits. If you have to write down every expense, you may find ways to cut unnecessary spending and save money.
Reasons for Spending
As you can tell so far, staying on top of your finances is matter of paying attention. Just like paying attention to what you spend, it’s helpful to also understand why you spend.
Some people spend money out of boredom, or when they feel sad or upset. Others spend because they feel obligated to in social settings. These situations don’t necessitate spending money, and could be dealt with in other ways.
Here are some questions to ask yourself before opening your wallet (source: money.msn.com).
Can I afford to make this purchase?
What am I getting out of it?
Am I getting the best deal possible?
How long will it take me to earn this much money back?
What am I giving up to buy it?
Projections for Your Future
Another part of your finances to be aware of is your goals for the future. It’s smart to have a savings account for any extra money, but you’ll be more motivated to save when you have something to save for.
Consider what the next few years holds for you. Will you want to buy a house? A car? A trip around Europe? Set up a separate account dedicated this goal. Then next time you go to make an unnecessary purchase, you will think of your goal, and save the money instead.
Since the future is unpredictable, it’s wise to also be aware of worst-case-scenario options. One of the biggest causes of financial ruin is medical expenses from an accident or illness.
Guidelines for personal bankruptcy in Toronto are different from the guidelines in Tennessee, so find an attorney, like those at Paddon & Yorke Inc, who know the rules in your area.
Even if you are financially stable right now, knowing the options will prepare you in case you find yourself facing a change in fortune.
If you know what to expect and how to navigate the situation, you will get your feet back under you in no time.
It’s easy to be jealous of rich people and assume they don’t have to pay attention to any of their finances. In reality, being rich comes from being hyper-aware of where your money goes, how you use it, and where you can improve your budgets. Pay attention to your money, and you will enjoy financial stability and success.Facebook.com/doable.finance