Summer is a perfect time to get rid of the old and bring in the new, and I’m not just talking about old shoes. It is also a perfect time to investigate your finanaces and see how and where to makes improvements.

Here are seven easy tips for cleaning you finances;

1. Tracking your expenses is a good start because it allows you to see where you might need to make any adjustments. Look at just one month and work out how much you spend on fixed expense (like utilities, rent, phone cable etc.), and how much on variable (restaurants, clothes, vacation etc.)

2. Next, take inventory of your asset’s - from accounts to credit cards and investments. This will create a clearer picture of where changes - if any - need to be made.

3. Be realistic about what you can afford. Rather than impulse buying and not thinking about how you will pay for it, take a minute to consider where that money will come from. This will help in preventing you from spending money you don’t have, or can’t afford to spend.

4. Live within your means. It is hard, but once you follow tips 1 and 2, you will have  a better idea of what you can afford and your own spending habits. This will go a long way in helping you eliminate unnecessary purchases.

5. Unfortunately before the new financially-savvy you can blossom, its time to deal with any old debt credit cards or other accounts may have accrued. Once you have set a realistic plan to eliminate any debt you might have, you will be free to spend more wisely.

6. There are three types of automation which can make your earning and spending much easier and faster. Firstly, direct deposit of your paycheck into your account will allow you access to your money faster. Secondly, by enrolling in auto-pay for your regular bills, you can reduce the likelihood of accumulating debt. Thirdly, by enrolling in paperless billing, and only receiving your statements online, you will not only save yourself time and effort (since everything will always be
organized and where you can easily access it), but also be helping the environment.

7. By deciding on a definite financial goal for next year, such as a new car or family vacation to Europe, you will have time to plan for it and save accordingly. This goal will also help reduce the temptation to splurge or buy something on impulse.

This entry was posted on Friday, August 1st, 2008 at 6:40 pm
Filed under All Entries, Finances.
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