Skip to main content

Why Its Important To Stay on Top of Your Finances



Do you find yourself living paycheck to paycheck?  If so, you may not be properly staying on top of your finances.

According to Chase.com there are 5 ways to get your finances under control in 30 days.  Here they are:



Check Your Credit Report

Checking your credit report regularly is a good habit to form. This allows you to keep track of where any mistakes may be and remove them.  It also allows you to see where your credit stands. 

Always go over all of the accounts listed on your report carefully and make sure that they all belong to you.  Also, make sure that any accounts you closed in the past have been closed.  You should also monitor for any incorrect reporting of delinquency.



Open Letters From Your Bank

A lot of us like to toss junk mail or what we perceive to be junk mail in the trash without opening it first.  When it comes to your bank, always open the mail that is sent.

Some banks send out letters about increasing your credit limit.  This may help build up your credit score.  The amount of available credit you are using at any given time, attributes to your score.  The lower your utilization, the better your score can be.



Reevaluate Your Spending

This should be done a couple of times a year.  Review all of your financial commitments to make sure you are not spending money on things you don't need or can't afford.  

According to Chase Rubin, who is a private trader, this is especially important if you are looking to open a business.  Bank and credit card companies will always look at personal credit history of an entrepreneur when deciding whether to provide them with a business bank account, credit card, or to extend a loan.  Even private investors run a background credit check before making a decision.

You also want to be sure you are not spending on thing that don't align with your financial goals.  Another thing you want to review is your credit card and bank statements for the past 3 months.  Ask yourself if you are spending too much on the little things, like lunch of coffee.  You can save money by packing your own lunch and brewing your own coffee before leaving for the day.


Think Big and Save Bigger

As Americans, most of our income is spent on housing, food and transportation. You should look to reduce expenses in these categories, according to Grant Sabatier of Milennial Money.  One of the things Grant did to save money was move to a smaller apartment that was closer to his job.  This allowed him to get rid of his car and walk to work.  He saved $800 a month by doing this.

This may not be the best solution to you, but look for ways to reduce spending on your biggest expenses and create a plan to follow up on your progress, while reevaluating as you go along.

Another smart thing to do is set up balance alerts with your credit card companies so that you can stay on top of spending.


Ask Yourself, What Do I Truly Value

Align your spending with your values.  This will help you eliminate expenses.  Financial planner Eric Roberge advises this and uses one of his clients as an example. 

The married couple commuted to and from work together daily and were spending $400 a month on parking in Boston.  They were doing this while trying to save for a vacation.  After discussing their core values, they realized that wanted to have autonomy in their relationship: alone time to read and reflect.  That was their core value.

Their commute would have been the perfect time to do this, except that one of them always had to drive.  They solved this by stopping the carpool and taking the commuter rail.   It saved them $160 a month.  This not only gave them alone time, but allowed them to save for vacation.

If you take an hour to sit and write down what you really value with yourself and partner, you can identify your core values.  Then you should look over the past 3 months of spending and see which recurring expenses are not lining up with those values.  There is where you can make cuts or changes.


I hope these tips help you to better identify how you can strengthen your finances.


Disclosure:  This is a sponsored post powered by Diamondlinks.net.

Comments

  1. I just raised my credit limit on my credit card! I should open up letters from my bank more often.

    ReplyDelete

Post a Comment