Personal finance management is one of the very few disciplines that can be learnt from childhood. Though it’s not conventionally taught in schools, the immediate perks of good finance management can be realized from your early ages with a little bit of help from your parents. Right from working towards your piggy bank saving goals to keeping track of your insurance and credit card bills— the need for administering your finances remains unassailable. Now, around 58% of the Americans do not really have a retirement plan in place. There is a gross discrepancy between their financial plans and savings. While most of them believe that they would need around $300,000 to see through their post retirement days, the average American is generally able to save up around $25,000 at the time of retirement. The average credit card debt of Americans stands at a grim $15,204. No matter how unflattering the scenario is, there are definite ways to battle it. Read on to learn more about ways of honing your finance management skills.
Do not Start Budgeting Right Away- Watch your Finances First
Money management is an ever evolving process and most of the times it’s quite difficult to pinpoint the exact time when one resolves to hone his skills in this regard. Still, if you have just determined that there is a strong need to readjust your financial plans just because you have not been able to meet your savings goal, then it would be advisable that you “watch” your financial behavior first. Instead of jumping straight in to the “budgeting” bandwagon you should first keep track of your expenditures and savings for each month. Save all your receipts. Determine how much cash you need and how much you have been able to save up as the calendar flips.
Now start working on your budget. Categorize your purchases duly. Since you have already kept track of your daily expenditures it will be a lot easier for you to work towards your savings. The plan- at the onset- would be to make a budget and stick to it. There are a number of ways to save up:
- Watching out for major discounts while shopping
- Aiming for off season trips especially if you’re a frequent traveler
- Prioritizing your student loans in a bid to pay them off early so as to avoid paying up penalties
Realize the Importance of Financial Check-Ups
Get organized with your funds. Being muddled with your financial records makes it difficult for you to get your financial check-ups done smoothly. Make sure that you are assembling all your financial documents viz bank statements, plastic cards bills, investment statements, stock accounts, deeds, policy documents etc and sorting them in piles. Make sure you’re creating files for each type of document. They can either be paper or electronic. However, the resource should be safe. Documents which are difficult to reproduce should be stored in water or fire proof safes. Preserve your pay stubs for the entire year until you get your W-2 and when you finally receive your W-2, make sure it’s compliant with your final pay stub. Your financial check up would also include other steps like:
- Evaluation of your retirement and investment statements
- Reviewing insurance plans
- Studying the global economic scenario closely in a bid to make adjustments to your financial plans thereby avoiding disaster
Thus to wind up, it must be said that these are the three basic areas that you need to work on while managing your finances. Retirement planning is one of the major areas where youngsters falter. Your retirement days might be nowhere near today. But saving up from early remains important. It will give you the sufficient time to identify your flaws while working towards your financial goals and to correct them. So go ahead and have a great financial present and. future!