When it comes to money management it involves more than going to work and paying your bills on time. You also need to keep track of your investments and registered retirement accounts. You will also need to keep track of your receipts for tax purposes especially if you have a business.
The first step is to gather up all of your bills, this may include any outstanding debt you may have on line of credit, your credit cards or other loans you may have. Take the information and put it into a pile where you can see it all at one glance. You may need to write it all down if you have to. Start by making columns for everything including the name and address of the creditor. Make sure you include gas for your car and groceries and even a small amount for entertainment purposes.
Money management is all about creating a cash flow plan that you can follow and stick to. Religiously! We all want to have financial independence and it is important to us. Having a plan is the way for you to achieve it. Do not let anything stand in your way. Many people want to be deb free but in this economy is a hard to do that. Be a part of the minority and get debt-free now.
Next step is to figure out what your paychecks or your take home pay will be every week or however often you get paid. If you work the same number of hours every week then this will be easy and you will not have to spend a whole lot of time on it. If you have your own business and your take home pay fluctuates then take your average for your weekly take home pay for last year.
When you are finished with this step then take the list of bills and match each one up to a corresponding week in the month. This can be done by sorting them by the due dates. You may need to break up a payment and save throughout the month for larger bills, for example your mortgage payment. If this is the case then you need to ensure you save enough each week so that at the end of the month you have enough for your mortgage payment.
You may not be able to do this for all of your bills but for the larger bills you have you need to be able to work it out so that they can be paid in full and on time by the due date.
If you need help, there are several solutions. You can ask for help from a family member that has a working spending plan. You can also seek the help of a financial advisor or a Financial Planner. There are also software programs to help you with you Cash Flow Plan. These programs are available on line and you might even be able to find a free version. Just remember that the free version may not have everything you need or there may be some other limitations because they are free. Start by looking over it carefully and see if it will give you everything you need to prepare your Cash Flow Plan. If you are just starting out then maybe free is all you need.
When you get all your financial information compiled and sorted then you will need to input the information so it makes some sense. Start with the first week and subtract everything you will need to come out of that paycheck. Make sure you pay yourself too? If everything works out and you still have some left over that is awesome.
If you do not have enough to cover all your expenses then you need to make some hard decisions about managing money and make the changes you need to make so you can live within your means. This is a very simple way of handling your finances at a very basic level. The way to ensure that you achieve Financial Independence is to have a systematic way to manage your finances.
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One sure way to gain financial independence is to organize your financial life. Start by keeping track of your monthly expenses.
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