Have you made a resolution to get your finances in order, or are you working towards saving or investment goals?

It’s not always easy to manage your finances, but if you follow these golden rules, you should find life a lot less stressful.

What About a Budget?

There’s nothing more crucial than budgeting.

If you don’t already swear by a monthly budget, now is the time to devote a small amount of time to getting a budget up and running. Budgeting enables you to see how much you spend per month, how much you earn, and how much you could potentially save.

With a budget, you can monitor spending, reduce the risk of getting into debt, and give yourself a much clearer picture of where you are in terms of your financial goals. Many people now use apps or spreadsheets to budget, but there’s nothing wrong with using old-school techniques like writing expenses down on a pad and paper.

Make sure you include every outgoing payment, and update your budget as you go to ensure that it is accurate.

Action Steps To Consider

  • Create a budget, even if that budget is simply on notebook paper.
  • Separate your expenses between fixed and variable, and take a hard look at your variable spending.
  • Take steps to cut your variable expenses each month
  • Consider using a budgeting app to monitor your spending
  • Set up a separate bank account to discipline yourself to save.
  • Save 5% of your monthly gross income

Understanding Tax Obligations

Many people pay tax through withholdings on salary, but if you’re required to file a tax return and pay your taxes on an annual basis, you need to be aware of deadlines, and ensure you have enough money set aside to cover the bill.

Calculate how much tax you have to pay in advance, and figure out a saving plan. If you do encounter problems with tax, it’s best to act quickly, rather than bury your head and hope for the best.

If you can’t pay all your tax, for example, don’t hesitate to get legal help with your tax bill. An experienced attorney will be able to talk you through the problems and find a solution. Working out tax bills and payments isn’t always a walk in the park, and this is why it’s so beneficial to ensure your accounts are in order.

If you don’t understand the tax system, or you’re unsure how much tax you owe, seek advice.

Tracking Device

Have you ever looked at your bank balance and seen a figure that was much lower than anticipated? In this day and age, when we have multiple direct debits, and we can make instant payments without getting cash out, it can be tough to keep up with movements in our accounts.

Tracking spending is essential. Use apps and Internet banking to check your balance on a daily basis, and make sure you know how much money you’ve got available.

What About Debt?

If you’ve got debts you’d like to pay off, use your budget to work out how much you can pay off each month. Tackle priority debts, for example, final demand bills and credit cards with high interest rates, first.

Make the Effort

If your financial situation is stressing you out, hopefully, you can make the effort to get back on track.

Try EarnUp today.

 

 

A version of this post was originally published on Accounting Accidentally by Ken Boyd of St. Louis Test Preparation

Photo by Dakota Corbin