BLOG_2019_09_05_Top 10 Ways to Clean Up Your Financial Act
Top 10 Ways to Clean Up Your Financial Act
5 SEPTEMBER 2019
Almost everyone’s finances can use a little cleaning.
So whether your finances just track a little dirt into the room or have you wading hip deep in muck, below are 10 practices that can clean you up.
1. Know your numbers - Your income and expenses, your credit scores, the interest rates you pay and earn, how much you have in your retirement accounts, savings and checking accounts, etc. When it comes to money, knowledge truly is power. Don’t hide from your finances. If you don’t understand these things, ask for help from someone who does understand.
2. Keep it separate. If you run a business, don’t mix personal and business finances. This may be hard in the beginning when there is very little difference between you and your business as a sole proprietor but as soon as you can, separate the bank accounts.
3. Know your type. Knowing if you tend to be a spender, saver or avoider helps you steer clear of default behavior. If you’re a spender install habits to help curb your spending to below that which you earn!
4. Don’t spend what you don’t have. Sound advice that too many ignore—and regret. Credit card interest rates are exceptionally high and interest accumulates quickly. You start paying interest on interest in just two months if the bill is not paid in full.
5. Save and invest, no matter what. Even if you save and invest only a few dollars a month at first, what counts is the habit. The impact of compounded interest of the years can be the difference between being able to retire with ease or being forced to continue working.
6. Stay organized. Physical clutter contributes to mental clutter, which exacerbates financial avoidance. Keep your records up to date and in a secure place. And make a personal will!
7. Create a monthly spending plan. The plan keeps you aware of disparities between income and expenses. In the beginning, keep a journal, writing down every single thing you spend money on – and then look to see where you may be throwing money away without even realizing it. Would this money be better used by investing it?
8. Bank/pay bills online. The convenience of 24/7 access outweighs any perceived security risks. Also set up auto payments when you can, as this reduces the likelihood of missing a payment.
9. Be card-conscious. Pay off credit card purchases every month or pay your bill BEFORE you make a purchase. This will help keep your credit scores high.
10. Find a money tracking system—and stick to it! Consistent action is more important than the system you choose. If you are running a business, hire a bookkeeper and/or an accountant if necessary. Or get apps that help to copy receipts and upload. It is critical you keep track of your personal and business expenses.
