It’s that time of year when everyone goes into financial review mode. Maybe it’s the weather or the whole concept of a spring clean. In any case, it’s never a bad time to review you financial and tidy things up – the way you would minimize your home and know where everything is and what it’s for. Here’s how.
Make a financial calendar
Sometimes we like to put things off. When we put off events like a monthly financial review it means we can continue with the idea that everything is running smoothly and there’s no need to make any changes. But that might be an inefficient way to live.
By turning up to your important financial dates you get the chance to review your financial and save some money. Consider a financial calendar set to specific dates. It will remind you of appointments you should attend and money to-do tasks.
Check your interest rates
Sometimes the interest rate on your accounts appears to be insignificant. It is so marginals after all. Conversely, the interest rate on your debts and your credit cards might be hampering your ability to pay them off and to save.
You need to check all your interest rates. If you get a low rate on your current account, consider shifting this money into a higher interest savings account. When it comes to debt, remember to pay off the one with the highest interest first and work down.
Track your net worth
Your net worth is the difference between the money you earn and the money you owe. This is the big picture number that gives you an idea of where you are in relation to your financial goals. It can tell you if you’re making progress or if you need to make some tweaks.
Pick one day each month to go over your finances with a financial manager like Kevin Canterbury. Stick to this appointment and set a reminder in your calendar. This will give you time to track your net worth and decide if you need to make any financial changes.
Set up a budget
A budget is the way you plan your day to day spending. You need a budget plan if you want to reach your financial goals in the short and long term. Without a budget you will have little or no control over your spending.
It isn’t hard to make a daily budget, especially with so many budget apps available these days. Simply look at your income and outgoings. List all of the essential spending and find ways to save. Decide what you are willing to sacrifice.
Get on a cash diet
If you really do struggle to save and you think your spending is a bit out of hand, get on a cash diet. This is when you use all cash instead of cards and apps to buy things. The idea is that it’s harder to part with cash than to swipe a card.
When you only use cash you need to make an extra effort to take the cash from the bank and hold it in your wallet. Unlike other payment systems you always know how much you have to spend.