6 Ways to be Better Manage Your Personal Finances
by Meghan Carmeck
Updated on Dec 31, 2016
The year 2016 had its share of upheavals for America and a lot more countries around the world. The uncertainty of 2017 hangs as a looming cloud, in particular the changes the new government would bring in every sector. Would these changes effect things that fall under our areas of interest? While these are questions to introspect on, it becomes important to understand our position in view of financial stability. How secure are you? If you could estimate your net worth, what would it be? If 2017 could persuade us to embrace frugal spending, wouldn't you feel much safer in this big world. Read on to find out financial resolutions you could take to make 2017 much better.
1. Download Smartphone Apps to manage your Finances
Smartphone Apps to manage your money has advanced in leaps and bounds in these few years. Budgeting Apps will help in setting a spending limit for the day, week, or month, the options to customize such apps are abundant. Further, setting up reminders for bills on fixed utility will save you a considerable sum of money from going into late payment fees which will also improve credit score. Reliable apps take away the stress of keeping in track of bills, payments, savings and the monthly budget, which would eventually rein in impulse expenses and increase savings. Most Smartphone apps sync with your cloud or email, and so any damage to your phone will not affect the backed up data on your finances.
2. Automatic Online Payments
How keen are we to embrace automation in banking? Yet the number of people who opt for online and mobile banking services is rather low in comparison to the overall population. If you are technology literate, sign into your banks online service and understand the things you can do without the hassle of going to a bank or paying your bills at a live counter. For those of us who might lack the skills to navigate around a banking website, you can always learn through the help section or visit your bank and ask for assistance in understanding their online interface. Think of all the time, effort and inconvenience you end up saving in choosing online banking options. Automating a certain amount of money to be transferred from your account into a savings fund, will curb impulse spending, you can also schedule a minimum amount to be paid towards regular bills, such as phone, electricity, taxes and water.
3. Debt is never a good thing, when accumulated
Debt can go out of hand in no time, despite the low rates of interest we enjoy today, these rates may soar in the future, making it very important to set out a certain amount every month to clear off a percentage of the debt. When prioritizing the debts to repay, take into account credit and store cards that charge high interest rates. To take frugal spending a step further, keep one credit card for emergency needs and surrender store cards, having such options will only increase your desire to spend on impulse. In case of mortgage payments that eat a large hole in your savings, trying to get fixed interest rates for a certain number of years will make repayment easier.
4. Shop Right: Analyze your Spending like an Outsider
If you spend more than you earn, you can never feel financial security, in most cases those who spend more than they earn don't know how much they really spend. We human beings are so prone to losing track of things unless it is clearly spelt out in black and white, in other words, making a habit of keeping records of your expenses will improve 2017 a great deal. A first step in the right direction should be to retire your credit card for emergency spending and pay for all your expenses using a debit card, this will help to maintain records for everyday expenses such as newspapers, food, coffee etc. Spend a few hours of the weekend, downloading and looking at a spread sheet of your expenses, there are also apps and software's that will analyze this data. This will help you understand how much you spend on other expenses after excluding expenses incurred for regular bills, insurance and mortgage. A tip in reducing the impulse to shop is to cancel subscriptions to email and mail sales alerts, only buy things you need and do not splurge on things you want.
5. Manage Unexpected Expenses Carefully
Are you someone who lives solely in the present without saving for the future? How would you meet an unexpected expense? A new tire for your car, broken pipes in the house, some immediate money at hand would fix things in a jiffy, instead of breaking into fixed deposits to pull out money to meet such expenses. If you continue to contribute towards an emergency fund every month, at the end of the year, if the money is unspent you can use a portion of it to have fun by booking a short vacation.
6. Be Careful About Investments
The incoming government is expected to deregulate a number of sectors, while this might seem a great opportunity to most, it becomes rather important to invest with caution because deregulation will always poison healthy economies. Do not fall victim to investments and stocks that might go bad.
