(Newswire.net — June 5, 2020) —
Personal finance can be a tricky business. Keeping track of income, expenses, and taxes (not to mention investments and assets) can start to feel like a full time job. Luckily, there are some steps you can take to help track your finances throughout the year. Your finances will still be as complicated as before, but you can help yourself make sense of them. Here are six ideas for staying on top of things.
Talk to an Accountant
If you’re not an expert on finances, then it might be a good idea to contact someone who is. Accountants are professionals who know everything there is to know about the ins and outs of personal finance. Putting an accountant in charge of your finances will give you peace of mind, as you’ll know that your financial health is being looked after. An accountant might also be able to save you some money, since they’ll know exactly how to manage your taxes. All those forms can be incredibly confusing to a lay person, but an accountant knows them like the backs of their hand.
Download a Personal Finance App
Technology can be a big help when it comes to managing your personal finances. There are tons of applications available that store your financial information and help you understand it. Some apps, like Mint, Personal Capital, and Personal Expense, take in comprehensive financial information, from retirement plans to bank accounts, and help manage financial transactions, like paying bills and making investments. Other applications, such as Level Money and Bill Guard, aren’t quite as all-encompassing but help track your income and your budget. These applications analyze your financial situation and display their findings in simple, easy-to-read reports.
Keep Written Records
The enemy of financial security is not just bad habits, but an ignorance of the effects of those habits. If you don’t know exactly how much money you’re bringing in and how much you’re spending, then you’re bound to get yourself into trouble. To be able to budget effectively, you need to know exactly where you stand. If you don’t hire an accountant and you are hesitant to download an app, you can still track your finances the old fashioned way. A simple notebook can give you a place to track your expenses and transactions. Then, it’s a matter of doing simple arithmetic to find how your expenses compare to your income. Just be careful to record every single transaction. A mistake here and there can lead you seriously astray.
Make a Computer Spreadsheet
This approach is less involved than downloading an app, but a bit more modern than using a pen and paper. Spreadsheet programs like Microsoft Excel are easy to master and incredibly convenient, keeping all your information organized and doing a lot of the mathematics for you. Compared to the application option, using a spreadsheet gives you a bit more control since you are inputting all the data yourself instead of counting on a program to do it for you.
Categorize Expenses
Once you have taken the steps mentioned above, you should have a pretty good idea about the state of your finances. Still, there are ways you can maximize the usefulness of that information. Placing your expenses in different categories allows you to see exactly where you’re spending the bulk of your money. If eating out is consuming the bulk of your budget, you’ll be able to see that clearly and change your habits.
Check Your Credit Rating
Having good credit is an essential part of strong financial health. By keeping tabs on your credit rating, you’ll be able to ensure your future borrowing opportunities aren’t hampered by your current habits. Companies like Credit Karma issue easily-digestible reports, showing what your current credit rating is and what factors have determined it. You can use that information to improve your credit.