Welcome back to the Young
Adults Perspective series, where we offer insights and tips for newly
financially independent young adults. Last week, we
looked at the blooming industry of FinTech, and covered tools that
offer assistance for managing your personal finances. This week, we will be focusing
on a much simpler type of tool: a personal finance checklist. Having an
understanding of your full financial picture is a great first step towards
financial security, especially if you regularly review the items on your list. Everyone
experiences the occasional pitfalls of life that can cause debt to suddenly
rack up and ruin a good plan. You can be bounce back from these setbacks more
easily if you implement these strategies:
Keep
Good Records
One of the most effective
ways to track your payments and savings is to maintain proper financial
records. While it may seem confusing and tedious at first, this simple strategy
will help you to always know how much money you have. A common problem for many
people is poor book keeping. This mainly arises because they fail to keep track
of their balances in all of their accounts. While it’s incredibly important to
keep track of your checking accounts, it’s also important to make sure your
savings accounts are in line. That way, you will know your financial standing
everywhere if you need to transfer money, which is especially critical if you
need to make payments. Some people prefer using a physical checkbook to do
this, but there are plenty of digital options like Quicken or NCH Software
to help you for little to no cost.
Save
for the future
You hear about stories
like this all the time these days: people who believed that after decades of
hard work they had worked finally saved enough money to retire happily… only to
realize a few years down the road that they don’t have enough saved to maintain
the lifestyle they want in retirement. As the cost of living continues to rise,
it becomes more and more important to start saving for the future early, even
if you are a recent college grad. Make it part of your personal finance
checklist to set aside a little bit of every pay check towards retirement
savings. If your employer offers a retirement savings match, take advantage of
it by contributing everything you can to get the maximize match. It may mean
you have a little less money today, but your future self will thank you.
Monitor
your spending & budgets
Are you using a budget to track your income and expenses? If you’ve been diligent about following it, you’re one step ahead of the game! Having a budget isn’t enough, however. When was the last time you reviewed your budget? Consider all the items in some of your core spending groups, like your bills, transportation costs, everyday needs and entertainment. Have prices risen or fallen significantly anywhere? Are there things you’re paying for every month that you don’t really use? Have you discovered new spending categories that were not previously included? You may find that you’re suddenly paying too much for some things, or your spending habits need some attention. You should make it a personal finance checklist item to review your budget and expenses every month. You’ll certainly benefit from the investment of time!
Do you have any other items that you feel belong on a personal finance checklist? Tell us about them in the comments below. The team at CESI is committed to helping you make wise financial decisions and to helping you understand how to get out, and stay out of debt. For a free debt analysis, contact us and find out how we can help.
This article was syndicated and originally appeared on the CESI Debt Solutions website.
