It Is Time to Plan Your Finances for The Year
Whether you are reading this from the curbs of your office cubicle or the comfort of your home, one thing is clear: you have cleared the happy years of ‘coffee mugging’ during your junior college, polytechnic, or university days. You are finally earning your keep. For that, you certainly deserve a pat on your back. Some graduates call this transition ‘financial independence’. But truth be told, financial freedom is not liberating oneself from parental allowances, or asking for little pocket money whenever you feel like.
The flipside is that it is possible to budget yourself and succeed in managing your expenses without a professional’s aid breathing down your neck. Indeed, it requires a bit of effort at the start, but in a couple of months, you’ll be working on autopilot, meaning you’ll improve your finances without having to drown in a sea of bank account statements or wrack your brains every time you take out your wallet.
Follow our financial tips to kickstart your year with the habit of preparing yourself financially.
Know Where the Money is Going
Remove time now to create a spending plan or a 2019 budget so you can manage exactly how you will utilize your capital in the upcoming year. Start the process by listing all your income alongside your liabilities or expenses. Include every payment you have, from small to large, and evaluate whether some of these periodic or recurring items can be eliminated. Don’t leave anything out of your upcoming year budget, even incidental things like the coffee and bagel you purchase three mornings a week.
Everything we do is a habit. Typically, our approximation of expenditure is lower than what we spend. One way to govern your actual expenses is, during the next few weeks trace every penny you layout and every purchase too. After a month, you can compare your estimate with your actual spending. For many people, the amount they spend is as much as 50 percent more than their estimates.
Strategize to Reduce/Eliminate Any Credit Card Debt
Start thinking about how you want to decrease any unsecured debt you have. There are several free debt calculators online that can be used to determine how long it would take to pay off any credit card debt you have accumulated. Once you realize how long it takes to pay off a single card if you were paying the monthly minimum, it might be an incentive to cease any unnecessary spending. Paying off a card debt as soon as possible is especially necessary if you are planning to retire early. Lingering monthly payments can become challenging once you are no longer earning a regular income.
There are a variety of ways to pay down and pay off credit card debt. Experts advise working on the higher interest cards first; others suggest paying the smaller balances first. Whichever way you proceed, retain uniformity until you have paid the full balance on each card.
Reduce Your Expenses
Eliminate bad habits, wants, and see how you can reduce your expenses. For instance, take a look at your phone bill. If you are paying an odd $100 worth of subscription fees every month that you don’t need, call up your telco, and check if you can downgrade your plan to fit your monthly phone usage. This is an excellent example of how you can reduce your ongoing long-term expense without the need to cut it out entirely.
Budget and Follow Throughout
After establishing the long-term expenses, reduce those you can, eliminate most of the wants you have, and follow through your plan. There are a plethora of mobile apps that offer reminders to budget, or you can even do it the traditional way, by pinning it down on paper and checking it off every month.
Discover and find out which works best for you. Some may like the idea of having an app which automatically reminds you after customizing settings, whereas some prefer the pen and paper idea. There is no right or wrong here, as long as the goal of tracking your budget is achieved.
Have the Money Talk With Your Partner
The end of the annual year is an excellent time to check in about financial aims. Think about what you wish to do in the following year; then consider how you would like to pay for these goals. Finally, talk with your partner so you both know each other’s priorities and how you can meet them together, as well as achieve joint objectives. The objectives could be vacations or plan to relocate to a different place in retirement.
Another benefit of this activity is that if something unexpected were to happen to either of you, the other would know the resources and how to access them. Surprises in this area can be troublesome, so keep transparency between the two of you as much as you can.
Financial downsides can be avoided with the ‘Pay-Yourself-First’ method. It means to save and invest, instead of saving at the end of the month with what’s left behind. Usually, your bank account will be emptied, the victim and aggressor both being yourself.
It is advisable to have at least two bank accounts, one for spending and other for channeling the salary into savings. Transfer a fixed amount of funds to your spending account every month. An alternative method would be to transfer funds from the ‘savings/salary’ account to your spending account when the latter runs low.
So, play hard with your money, but make your money work harder. You will live to enjoy it more.
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Plan your finance in advance, strategically reduce your credit card bill or consolidate your debt. In this event, you need extra cash to clear the other’s debt, just approach to 1st Credit SG legal moneylender to get the lowest interest loan. The responsive staff will tailor the best loan base on customer existing situation.
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