Do you know to handle your money? As a leading auditing and accounting company specialising in a range of financial-related services, we’re passionate about empowering businesses by helping them develop good management skills of their financial resources.
However, it’s important to understand that behind these businesses are individuals who have their own personal finances. In this blog post, we’re going to be focusing on money management tips – for the individual.
While some of these tips might be applicable to businesses as well, we’re hoping this blog will assist readers in developing a good sense of managing their own personal finances.
A good starting point, in general, is identifying and setting goals. In doing so make sure you prioritise which goals are most important and set a time frame for each one. Setting goals are pivotal because it allows you to keep track of your progress.
Below are some good goals to think about. Remember that the earlier you start working toward your long-term goals, the easier it will be to achieve them.
- Purchasing a home
- Purchasing a car
- Saving plans
- Dissolving debt
- Retirement plans
Planning is important – even more, when it comes to finances. It’s like a road map to how you’ll achieve those goals you set out in the first step.
Reflect on your financial goals and strategise to create a plan of action that would help you achieve them. Setting your financial plan in action will help you utilise more control over your finances and manage it well. When doing this, keep in mind the following points:
- Budgeting is the foundation of a financial plan
- Build an emergency fund for unexpected expenses
- In every stage of your plan, always save for long-term goals
Prioritise Your Budget
By now, most of us have heard the saying “stick to your budget.” But do we really understand the significance of it? Your budget is one of the most powerful tools you have for managing your finances, so it’s important that you make use of it – properly!
A foundational principle of budgeting is that you SHOULD NOT spend more than you earn. It might come across as being quite obvious, but with the increasing expenses of everyday life, it’s easy to spend more than you make. This is why prioritising your budget is crucial.
Manage Your Debt
Financial debt can often be a burden, especially when you have more 1 than one debt that you need to pay off. Most financial advisors will tell you that the smart thing to do is prioritise paying the debts that incur the highest rates of interest first.
These can include loans, credit cards and other types of credit accounts you might have. One way you could pay off your debt is by paying larger amounts to the highest interest-rates liabilities while still making minimum payments on the others.
You may even consult with your financial advisor or bank about setting up a consolidation loan; however, keep in mind that you should opt for one with a lower interest rate.
If you’re a business owner who’s interested in finding out more about how you can better manage both your personal and business’s finances, contact Brendmo Accountants and speak to one of our skilled professionals today.