Six Of The Best Ways To Keep Better Track Of Your Finances And Stay Out Of Debt
Saturday, June 13, 2015, 6:00 AM | Leave Comment
For successful financial management, it’s important to keep track of your finances and stay out of debt. Tracking your finances enables you to monitor and control your spending levels. By tracking spending and staying out of debt, you have the freedom to build wealth for future goals.
Here are six of the best ways to stay on top of your finances:
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Create a Written Budget
Financial success begins with creating a written budget. Rather than spending mindlessly, a budget allows for purposeful spending. It can help you identify areas you may need to cut back on to allow for greater savings or debt repayment. Writing down your budget will also help you to stick to it.
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Track Your Spending
For your written budget to be effective, you must also track your spending. If you don’t track your actual spending, you will likely find you overspend in certain areas of the budget you created.
Be prepared to make changes until you find a budget that works for you.
By tracking your spending, you can get a much better idea of how much you need each month for things like gas, food and entertainment. Those categories are much more difficult to track and budget than something like rent or insurance.
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Assess Your Bank Accounts
If you have not compared bank accounts for a while, you should. In past years, many checking accounts came with costly fees.
In addition, your needs may have changed over the years and you may need an account with different features. Research banks and the account features they offer.
Consider opening a new checking account that better meets your needs, say the professionals at Pinnacle Financial Partners.
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Establish an Emergency Fund
Experts recommend having an emergency fund of at least three to six months of expenses. This allows you to be prepared for unexpected expenses without having to reach for the credit card or take out a personal loan. Staying out of debt is a key component of successful financial management.
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Save for Large Expenditures
To stay out of debt, create a plan for saving for large expenditures. For example, rather than waiting until your vehicle has reached the end of its life, plan ahead and begin saving now for a replacement vehicle. You will be able to pay cash and avoid financing.
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Protect Your Family
If you have a family that depends on you, ensure that you have a life insurance policy to help provide for them.
Having a policy with a value of 10 times your salary will protect your family from financial ruin if you were to unexpectedly pass.
Your years of financial diligence could be wiped away from your family without a life insurance policy in place.
Take a close look at your financial situation today and determine what actions you can take to ensure your financial success into the future.
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