9 Tips to Get Your Finances in Order

 

Many people spend time on the weekends or during the week cleaning their house, putting things in order, throwing away things, organizing, updating, replacing and moving things around.  Some people do more extensive cleaning of their house when spring or the new year arrives.  Some people clean their house and donate unused items to charity.  Whatever the case – everyone cleans their house or place where their live but do you clean your finances?

Many people do not know how much money they earn, how much they spend or how much debt they owe. Organization is the key to getting your finances in order and cleaning your financial house.  Approximately seventy percent of Americans are living paycheck to paycheck.  In some instances people live paycheck to paycheck because they do not know where their money is going.  Here are 9 ways to help you get your finances or financial house in order and help you achieve your financial goals.

Increase Your Credit Score

Get a copy of your credit report at least once a year.  Get current on all late bills and dispute any errors.

Create a Budget

Create a budget or spending plan to determine how much you earn and how much you are spending.   Include savings in your budget.  Ensure that everyone in your family follows the budget. Track your spending daily, weekly or monthly. Use pen and paper, software or apps to assist you.

Reduce Spending

Reduce your expenses by determining areas where you can reduce spending by buying more needs vs. wants such as bringing your lunch to work, shopping at discount stores or buying generic brands. Call your service providers and ask about discounts or specials.

Pay Down Debt

Pay down debt and keep credit card balances at 20% or less of the limit which also helps increase your credit score.  Do not open any new accounts or incur any additional debt.

Establish an Emergency Savings Fund

Create an emergency fund to cover bills and monthly expenses for 12-18 months to prevent going into debt for unexpected expenses.

Plan for Retirement

Plan for retirement and contribute at least 20% towards a retirement fund each month.  Contribute to a retirement account through your employer or make automatic contributions to an IRA if you are self-employed or if your employer does not offer a retirement plan.

Pay on Time

Pay bills on time or before the due date to maintain good credit and increase your credit score.  Pay bills online or through automatic deduction to save money.

Assess Needs

Determine your needs for insurance such as life, health, disability and long-term care.  Make adjustments as needed on a yearly basis or when a life event change occurs such as divorce, death, long-term illness or childbirth. Bundle services with the same company to save money.

Get Organized

Organize all bills, financial statements, debt, and loans in separate folders.  Create a bill calendar to identify when each bill is due or create a list of keep track of bills.  Get a file cabinet, cash box or accordion folder to store receipts.   Tally receipts daily, weekly or monthly and track in your budget. Set alerts or reminder when bills are due and when account balances go below a certain limit.